485BPOS 1 file001.htm FORM N-1A




                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM N-1A

                        REGISTRATION STATEMENT UNDER THE
                             SECURITIES ACT OF 1933
                            REGISTRATION NO. 2-29858
                         POST-EFFECTIVE AMENDMENT NO. 76

                                       AND

                        REGISTRATION STATEMENT UNDER THE
                         INVESTMENT COMPANY ACT OF 1940
                            REGISTRATION NO. 811-1701
                                AMENDMENT NO. 51

                        DAVIS NEW YORK VENTURE FUND, INC.

                        2949 East Elvira Road, Suite 101
                              Tucson, Arizona 85706
                                (1-520-434-3771)

   Agents For Service:           Thomas D. Tays, Esq.
                                 Davis Selected Advisers, L.P.
                                 2949 East Elvira Road, Suite 101
                                 Tucson, AZ 85706
                                 (520) 434-3771

                                      -or-

                                 Arthur Don, Esq.
                                 Seyfarth Shaw LLP
                                 55 E. Monroe St., Suite 4200
                                  Chicago, IL 60603-5803
                                 (1-312-602-2048)


It is proposed that this filing will become effective:
       X Immediately upon filing pursuant to paragraph (b) of Rule 485
       ____On ___, pursuant to paragraph (b) of Rule 485
       ____ 60 days after filing pursuant to paragraph (a)(1) of Rule 485
       ____ On _____, pursuant to paragraph (a) of Rule 485
       ____ 75 days after filing pursuant to paragraph (a)(2) of Rule 485
       ____ ___, pursuant to paragraph (a)(2) of Rule 485





   Title of Securities being Registered Common Stock of:
                                        ---------------

                  DAVIS GLOBAL FUND Class A, B, and C shares

                                EXPLANATORY NOTE

This Post-Effective Amendment No. 73 to the Registration Statement contains one
Prospectus (Class A,B, and C shares) and one Statement of Additional Information
describing the Davis Global Fund, a new series of the Registrant. This Amendment
is not intended to amend the prospectuses and statements of additional
information of other series of the Registrant.


                    RECESSION OF RULE 473 DELAYING AMENDMENT

This registration statement shall hereafter become effective in accordance with
the provisions of section 8(a) of the Securities Act of 1933.

The Registrant requests an immediate effective date of pursuant to Rule 485(b).

Davis
GLOBAL Fund
--------------------------------------------------------------------------------

Portfolio of Davis New York Venture Fund, Inc.

PROSPECTUS

Class A shares
Class B shares
Class C shares

December 22, 2004

The Securities and Exchange Commission has neither approved nor disapproved of
these securities, nor has it determined whether this prospectus is accurate or
complete. Anyone who tells you otherwise is committing a crime.

[Davis Funds logo and "Over 35 Years of Reliable Investing" tagline]

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Class A, B, and C shares of Davis Global Fund have been registered with the
Securities and Exchange Commission and, as of the date of this prospectus, in
the states of Arizona, New Mexico and New York. Shares of Davis Global Fund
currently are not available for public sale in any other state or jurisdiction.
Currently, only the directors, officers and employees of the Fund or its
investment adviser and sub-adviser (and affiliated companies) are eligible to
purchase Fund shares. The Adviser reserves the right to reject any offer to
purchase shares.

This prospectus contains important information. Please read it carefully before
investing and keep it for future reference.

No dealer, salesperson or any other person has been authorized to give any
information or to make any representations, other than those contained in this
Prospectus, in connection with the offer contained in this Prospectus and, if
given or made, such other information or representations must not be relied on
as having been authorized by the Fund, the Fund's investment adviser or the
Fund's distributor. This Prospectus does not constitute an offer by the Fund or
by the Fund's distributor to sell or a solicitation of an offer to buy any of
the securities offered hereby in any jurisdiction to any person to whom it is
unlawful for the Fund to make such an offer in such jurisdiction.

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TABLE OF
CONTENTS
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4 OVERVIEW OF DAVIS GLOBAL FUND

Investment Objective and Principal Investment Strategies
The Davis Investment Philosophy
Determining If This Fund Is Right for You
Principal Risks of Investing in the Fund
Performance Information
Fees and Expenses of the Fund Additional Information About Investments

13 DAVIS MANAGEMENT

Davis Advisors
Investment Professionals

16 ONCE YOU INVEST IN DAVIS FUNDS

How Your Shares Are Valued
Portfolio Holdings
How We Pay Earnings
Federal Income Taxes
Fees and Expenses of the Fund

23 HOW TO CHOOSE A SHARE CLASS

Class A Shares
Class B Shares
Class C Shares
Deferred Sales Charge

31 HOW TO OPEN AN ACCOUNT

Three Ways You Can Open An Account
Anti-Money Laundering Compliance
Retirement Plan Accounts

33 HOW TO BUY, SELL AND EXCHANGE SHARES

Right to Reject or Restrict any Purchase or Exchange Order
Three Ways to Buy, Sell and Exchange Shares
When Your Transactions Are Processed
Buying More Shares
Selling Shares
Exchanging Shares
Market Timing
Telephone Transactions
Internet Transactions

46 OTHER INFORMATION

Dividends and Distributions
Financial Highlights
Householding
Privacy Notice

B/C OBTAINING ADDITIONAL INFORMATION

OVERVIEW OF DAVIS
GLOBAL FUND
--------------------------------------------------------------------------------

INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES

Davis Global Fund's investment objective is long-term growth of capital. The
Fund invests mainly in common stocks of both foreign and U.S. companies. The
Fund can invest without limit in foreign securities and can invest in any
country, including countries with developed or emerging markets. The Fund does
not limit its investments to companies in a particular capitalization range, but
currently focuses its investments in mid- and large-cap companies. Companies
with market capitalization of under $1 billion are considered
small-capitalization, companies with greater than $1 billion but less than $5
billion are considered mid-capitalization, and companies with market
capitalization over $5 billion are considered large capitalization. The Fund is
not required to allocate its investments in any set percentages in any
particular countries. As a fundamental policy, the Fund normally will invest in
at least three countries (one of which may be the United States). Typically the
Fund makes substantial investments in a number of different countries.

Equity securities are issued by both domestic and foreign companies. Sometimes a
company may be classified as either "domestic" or "foreign" depending upon which
factors are considered most important for a given company. Factors which Davis
Advisors considers include: (1) was the company organized under the laws of the
United States or a foreign country; (2) are the company's securities principally
traded in securities markets outside of the United States, (3) where does the
company earn the majority of its revenues or profits; and (4) where does the
company have the majority of its assets.

We use the Davis Investment Philosophy to select companies with the intention of
owning their stocks for the long term. We consider selling a company if the
company no longer exhibits the characteristics that we believe: (i) foster
sustainable long-term expansion of earnings; (ii) manage risk; and (iii) enhance
the potential for superior long-term returns. The Fund has the flexibility to
invest a limited portion of its assets in non-equity securities.

We seek to acquire companies with expanding earnings at value prices. We may
make such investments when a company becomes the center of controversy after
receiving adverse media attention. The company may be involved in litigation,
the company's financial reports or corporate governance may be challenged, the
company's annual report may disclose a weakness in internal controls, investors
may question the company's published financial reports, greater government
regulation may be

PROSPECTUS o DAVIS GLOBAL FUND o 4

contemplated, or other adverse events may threaten the company's future. While
we research companies subject to such contingencies, we cannot be correct every
time, and the company's stock may never recover.

THE DAVIS INVESTMENT PHILOSOPHY

Davis Global Fund is managed using the Davis Investment Philosophy, which
stresses a back-to-basics approach. We perform extensive research to buy
companies with expanding earnings at value prices and hold them for the long
term.

Over the years, the Fund's investment adviser, Davis Selected Advisers, L.P.
("Davis Advisors"), has developed a list of characteristics that we believe
allow companies to expand earnings over the long term and manage risk to enhance
their potential for superior long-term returns. While few companies possess all
of these characteristics at any given time, Davis Advisors searches for
companies that demonstrate a majority or an appropriate mix of these
characteristics.

FIRST CLASS MANAGEMENT

o Proven track record
o Significant personal ownership in business
o Intelligent allocation of capital
o Smart application of technology to improve business and lower costs

STRONG FINANCIAL CONDITION AND PROFITABILITY
o Strong balance sheet
o Low cost structure / low debt
o High after-tax returns on capital
o High quality of earnings

PROSPECTUS o DAVIS GLOBAL FUND o 5

STRATEGIC POSITIONING FOR THE LONG TERM

o Non-obsolescent products/services
o Dominant or growing market share in a growing market
o Global presence and brand names

We emphasize individual stock selection and believe that the ability to evaluate
management is critical. We routinely visit managers at their places of business
in order to gain insight into the relative value of different businesses.

DETERMINING IF THIS FUND IS RIGHT FOR YOU

Davis Global Fund is designed primarily for investors seeking long-term growth
of capital from a fund that invests in foreign and U.S. companies. Investors
should be willing to assume the risks of short-term share price fluctuations
that are typical for a fund investing in stocks and foreign securities. The Fund
does not seek current income and the income from its investments will likely be
small, so it is not designed for investors needing current income The Fund is
not a complete investment program.

PROSPECTUS o DAVIS GLOBAL FUND o 6

You should consider investing in this Fund if:

o You are seeking long-term growth of capital.

o You want to diversify your investments by including foreign companies in a
global portfolio.

o You are investing for the long-term.

You should not invest in this Fund if:

o You are worried about the possibility of sharp price swings and dramatic
market declines either overseas or in the U.S.

o You are interested in earning current income.

o You are not prepared to accept the risk of investing in foreign markets,
including, but not limited to, the risk of foreign exchange volatility.

o You are investing for the short term.

PRINCIPAL RISKS OF INVESTING IN DAVIS GLOBAL FUND

If you buy shares of Davis Global Fund, you may lose some or all of the money
that you invest. The investment return and principal value of an investment in
the Fund will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost. This section describes what we
think are the most significant factors that can cause the Fund's performance to
suffer.

o FOREIGN COUNTRY RISK. The Fund invests a significant portion of its assets
in companies operating, incorporated, or principally traded in foreign
countries. Investing in foreign countries involves risks that may cause the
Fund's performance to be more volatile than it would be if we invested
solely in the United States. Foreign economies may not be as strong or as
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. In addition, foreign capital markets may not be as well
developed, so securities may be less liquid, transaction costs may be
higher, and investments may be subject to government regulation.

o FOREIGN CURRENCY RISK. Securities issued by foreign companies are
frequently denominated in foreign currencies. The change in value of a
foreign currency against the U.S. dollar will result in a change in the

PROSPECTUS o DAVIS GLOBAL FUND o 7

U.S. dollar value of securities denominated in that foreign currency. The
Fund may, but generally does not hedge its currency risk. When the value of
a foreign currency declines against the U.S. dollar, the value of the
Fund's shares will tend to decline.

o MARKET RISK. The market value of shares of common stock can change rapidly
and unpredictably as a result of political or economic events having little
or nothing to do with the performance of the companies in which we invest.

o COMPANY RISK. The market values of common stock vary with the success or
failure of the company issuing the stock. Many factors can negatively
affect a particular company's stock price, such as poor earnings reports,
loss of major customers, major litigation against the company or changes in
government regulations affecting the company or its industry. The success
of the companies in which the Fund invests largely determines the Fund's
long-term performance.

o MEDIUM-CAPITALIZATION RISK. Investing in medium-capitalization companies
may be more risky than investing in large-capitalization companies.
Medium-capitalization companies typically have more limited product lines,
markets and financial resources than large-capitalization companies, and
their securities may trade less frequently and in more limited volume than
those of larger, more mature companies.

o HEADLINE RISK. We seek to acquire companies with expanding earnings at
value prices. We may make such investments when a company becomes the
center of controversy after receiving adverse media attention. While we
research companies subject to such contingencies, we cannot be correct
every time, and the company's stock may never recover.

o FOCUSED PORTFOLIO RISK. Davis Global Fund is classified as a nondiversified
fund and is allowed to focus its investments in fewer companies than a
diversified fund. Should the portfolio managers determine that it is
prudent to focus the Fund's portfolio in a few companies, the portfolio may
be subject to greater volatility and risk and the Fund's investment
performance, both good and bad, is expected to reflect the economic
performance of the few companies on which the Fund focuses.

o SELECTION RISK. The securities we select for the Fund may underperform the
Europe, Austrailasia and Far East Index ("EAFE

PROSPECTUS o DAVIS GLOBAL FUND o 8

Index") Index or other funds with similar investment objectives and
strategies.

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.

PERFORMANCE INFORMATION

Davis Global Fund commenced operations on December 22, 2004. The past
performance of the Fund will be included in the annual update of the Fund's
prospectus after it has been operating for a full calendar year.

FEES AND EXPENSES OF THE FUND

FEES YOU MAY PAY AS A DAVIS FUNDS SHAREHOLDER

paid directly from your investment

------------------------------------------------------------------------------------
Class A Class B Class C
Shares Shares Shares
------------------------------------------------------------------------------------

Maximum sales charge (load) imposed on 4.75% None None
purchases as a percentage of offering
price(1)
------------------------------------------------------------------------------------
Maximum deferred sales charge (load) 0.75%(2) 4.00% 1.00%
imposed on redemptions as a percentage
of the lesser of the net asset value of the
shares redeemed or the total cost of such
shares
------------------------------------------------------------------------------------
Maximum sales charge (load) imposed on None None None
reinvested dividends
------------------------------------------------------------------------------------
Short-Term Trading Fee (as a percentage 2.00% 2.00% 2.00%
of total redemption proceeds(*)
------------------------------------------------------------------------------------
Exchange fee None None None
------------------------------------------------------------------------------------
A Wire Fee of $5 for domestic transfer and $5/$50 $5/$50 $5/$50
$50 for international transfers may be
deducted from sales proceeds. See "Wiring
Sales Proceeds to Your Bank Account.
------------------------------------------------------------------------------------
*The short-term trading fee applies to the proceeds of Fund shares that are
redeemed (either by selling or exchanging to another Davis fund) within 30 days
of their purchase. See "Selling Shares" for more information on when the
redemption fee will apply.

PROSPECTUS o DAVIS GLOBAL FUND o 9

(1) See "How to Choose a Share Class" to determine whether you may qualify
for a reduced sales charge.

(2) As a Class A shareholder, only if you buy shares valued at $1 million
or more without a sales charge and sell the shares within one year of
purchase.

DAVIS GLOBAL FUND ANNUAL OPERATING EXPENSES

deducted from the fund's assets

------------------------------------------------------------------------------
Class A Class B Class C
Shares Shares Shares
------------------------------------------------------------------------------
Management Fees 0.75% 0.75% 0.75%
------------------------------------------------------------------------------
Distribution (12b-1) Fees 0.25% 1.00% 1.00%
------------------------------------------------------------------------------
Other Expenses(1) 0.30% 0.55% 0.55%
------------------------------------------------------------------------------
Total Annual Operating Expenses(2) 1.30% 2.30% 2.30%
------------------------------------------------------------------------------

These expenses are for the eleven-month period ended October 31, 2005. As the
period is less than one year, all expenses have been annualized.

(1) "Other Expenses" are based on estimated operating expenses for the first
fiscal year.

(2) Davis Advisors is contractually committed to waive fees and/or reimburse the
Fund's expenses to the extent necessary to cap total annual fund operating
expenses (Class A shares, 1.30%; Class B shares, 2.30%; Class C shares, 2.30%)
until October 31, 2005; after that date, there is no assurance that expenses
will be capped.6666

The difference in the fee structures between the classes is primarily the result
of their separate arrangements for shareholder and distribution services and is
not the result of any difference in the amounts charged by Davis Advisors for
investment advisory services. Accordingly, the investment advisory expenses do
not vary by class. Different fees and expenses will affect performance.

EXAMPLE

This example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.

The example assumes that you invest $10,000 in the Fund for the time periods
indicated. The example also assumes that your investment has a 5% return each
year and that the Fund's operating expenses remain the same. Although your
actual costs may be higher or lower, your costs, based on these assumptions,
would be:

PROSPECTUS o DAVIS GLOBAL FUND o 10

------------------------------- --------- -----------
If you sell your shares in... 1 Year 3 Years
------------------------------- --------- -----------
Class A Shares $601 $868
-------------------------------
Class B Shares $664 $1,043
-------------------------------
Class C Shares $336 $718
------------------------------- --------- -----------

-------------------------------------- --------- -----------
If you still hold your shares 1 Year 3 Years
after...
-------------------------------------- --------- -----------
Class A Shares $601 $868
--------------------------------------
Class B Shares $233 $718
--------------------------------------
Class C Shares $253 $779
-------------------------------------- --------- -----------

* Class B Shares' expenses for the ten-year period include two years of Class A
Shares' expenses since Class B Shares automatically convert to Class A Shares
after eight years.

ADDITIONAL INFORMATION ABOUT INVESTMENTS

Davis Global Fund's investment objective is long-term growth of capital. The
Fund's investment objective is not a fundamental policy and may be changed by
the Board of Directors without a vote of shareholders. The Fund's prospectuses
would be amended before any change in investment objective, and shareholders
would be promptly notified of the change.

Under normal circumstances, Davis Global Fund invests mainly in common stocks of
foreign and U.S. companies. The Fund can invest without limit in foreign
securities and can invest in any country, including countries with developed or
emerging markets. The Fund does not limit its investments to companies in a
particular capitalization range, but currently focuses its investments in mid-
and large-cap companies. The Fund is not required to allocate its investments in
any set percentages in any particular countries. As a fundamental policy, the
Fund normally will invest in at least three countries (one of which may be the
United States). Typically the Fund invests in a number of different countries.
The Fund may also purchase other kinds of securities; engage in active trading
(which would increase portfolio turnover and commission expenses and may
increase taxable distributions); or employ other investment strategies that are
not principal investment strategies if, in Davis Advisors' professional
judgment, the

PROSPECTUS o DAVIS GLOBAL FUND o 11

securities or investment strategies are appropriate. Factors that Davis Advisors
considers in pursuing these other strategies include whether they: (i) may
assist the Fund in pursuing its investment objective; (ii) are consistent with
the Fund's investment strategy; (iii) will cause the Fund to violate any of its
investment restrictions; or (iv) will materially change the Fund's risk profile
as described in the Fund's prospectus and Statement of Additional Information,
as amended from time to time. The Statement of Additional Information discusses
these securities and investment strategies.

ADDITIONAL INFORMATION ABOUT THE RISKS OF FOREIGN INVESTING. The Fund normally
invests a substantial percentage of its assets in foreign securities. While
foreign securities may offer special investment opportunities, there are also
special risks. Foreign countries involve risks that may cause the Fund's
performance to be more volatile than it would be if we invested solely in
domestic companies. Foreign economies may not be as strong or as 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. In addition,
foreign capital markets may not be as well developed, so securities may be less
liquid, transaction costs may be higher, and investments may be subject to
government regulation. The securities may be denominated in foreign currencies,
which "float" in value against the U.S. dollar. When foreign currencies lose
value against the U.S. dollar, the value of the Fund's investments denominated
in foreign currencies will lose value when they are converted to U.S. dollars.

SPECIAL RISKS OF EMERGING MARKETS. The Fund can invest in emerging or developing
markets. Securities of issuers in emerging and developing markets may offer
special investment opportunities, but present risks not found in more mature
markets. Those securities may be more difficult to sell at an acceptable price
and their prices may be more volatile than securities of issuers in more
developed markets. Settlements of trades may be subject to greater delays so
that the Fund might not receive the proceeds of a sale of a security on a timely
basis. In unusual situations it may not be possible to repatriate sales proceeds
in a timely fashion. These investments may be very speculative.

Emerging markets might have less developed trading markets and exchanges. These
countries may have less developed legal and accounting systems and investments
may be subject to greater risks of government restrictions on withdrawing the
sale proceeds of securities

PROSPECTUS o DAVIS GLOBAL FUND o 12

from the country. Economies of developing countries may be more dependent on
relatively few industries that may be highly vulnerable to local and global
changes. Governments may be more unstable and present greater risks of
nationalization, expropriation, or restrictions on foreign ownership of stocks
of local companies.

SHORT TERM INVESTMENTS. The Fund uses short-term investments, such as treasury
bills and repurchase agreements, to maintain flexibility while evaluating
long-term opportunities. The Fund may also use short-term investments for
temporary defensive purposes. At such times the Fund will be not pursuing its
normal investment policies. In the event that our portfolio managers anticipate
a decline in the market values of the companies in which the Fund invests (due
to economic, political or other factors), we may reduce the Fund's risk by
investing in short-term securities until market conditions improve. Unlike
equity securities, these investments will not appreciate in value when the
market advances and will not contribute to the Fund's investment objective.

For more details concerning current investments and market outlook, please see
the most recent shareholder report. The Fund's first shareholder report is
expected to be available July 1, 2005.

EXECUTION OF PORTFOLIO TRANSACTIONS. The Adviser places orders with
broker-dealers for Davis Funds' portfolio transactions. The Adviser seeks to
place portfolio transactions with brokers or dealers who will execute
transactions as efficiently as possible and at the most favorable net price. In
placing executions and paying brokerage commissions or dealer markups, the
Adviser considers price, commission, timing, competent block trading coverage,
capital strength and stability, research resources, and other factors. Subject
to best price and execution, the Adviser may place orders for Davis Funds'
portfolio transactions with broker-dealers who have sold shares of Davis Funds.
In placing orders for Davis Funds' portfolio transactions, the Adviser does not
commit to any specific amount of business with any particular broker-dealer.
Further, when the Adviser places orders for Davis Funds' portfolio transactions,
it does not give any consideration to whether a broker-dealer has sold shares of
Davis Funds.

PROSPECTUS o DAVIS GLOBAL FUND o 13

DAVIS MANAGEMENT
--------------------------------------------------------------------------------
DAVIS ADVISORS

Davis Selected Advisers, L.P. ("Davis Advisors"), serves as the investment
adviser for each of the Davis Funds. Davis Advisors' offices are located at 2949
East Elvira Road, Suite 101, Tucson, Arizona 85706. Davis Advisors provides
investment advice for the Davis Funds, manages their business affairs and
provides day-to-day administrative services. Davis Advisors also serves as
investment adviser for other mutual funds and institutional and individual
clients.

For the period ended October 31, 2005, Davis Advisors' compensation for its
services (based on average net assets) is estimated at 0.75%.

Davis Selected Advisers-NY, Inc., serves as the sub-adviser for each of the
Davis Funds. Davis Selected Advisers-NY, Inc.'s offices are located at 609 Fifth
Avenue, New York, New York 10017. Davis Selected Advisers-NY, Inc., provides
investment management and research services for the Davis Funds and other
institutional clients, and is a wholly owned subsidiary of Davis Advisors. Davis
Selected Advisers-NY, Inc.'s fee is paid by Davis Advisors, not the Davis Funds.

A discussion regarding the basis for the Board of Directors approving the
investment advisory and sub-advisory agreements is available in the Statement of
Additional Information. The Directors will consider whether to re-approve the
advisory and sub-advisory agreements in 2005; the basis for their decision will
be included in the Fund's October 2005 annual report.

PROSPECTUS o DAVIS GLOBAL FUND o 14

INVESTMENT PROFESSIONALS

DAVIS GLOBAL FUND IS TEAM MANAGED. Davis Advisors uses a system of multiple
portfolio managers to manage Davis Global Fund. Under this approach, the
portfolio of the Fund is divided into segments managed by individual portfolio
managers. Portfolio managers decide how their respective segments will be
invested. In addition, the Adviser's investment analysts may make investment
decisions with respect to a portion of the Fund's portfolio. All investment
decisions are made within the parameters established by the Fund's investment
objectives, strategies, and restrictions. The primary investment professionals
responsible for Davis Global Fund are:

o CHRISTOPHER DAVIS has served as the research advisor of Davis Global Fund
since its December 22, 2004 inception, and also manages other equity funds
advised by Davis Advisors. Mr. Davis has served as an analyst and portfolio
manager for Davis Advisors since 1989. As research adviser, Mr. Davis
oversees the Portfolio Managers of Davis Global Fund, using his
professional judgment to determine which portfolio managers to assign to
the Fund and the relative size of the segments of the Fund to each of the
portfolio managers. Among other factors, Mr. Davis considers the portfolio
managers' experience, results achieved, and the number of investment
opportunities which they have identified within their areas of expertise.

o JAE CHUNG has served as a Portfolio Manager of Davis Global Fund since its
December 22, 2004 inception, and also manages other equity funds advised by
Davis Advisors. Mr. Chung joined Davis Advisors in September 2003. From
2000 to September 2003 Mr. Chung served as a portfolio manager for
Marcstone Capital Management. From 1996 to 2000 Mr. Chung served as a
portfolio manager and analyst with Franklin Mutual Advisers.

o TANIA POUSCHINE has served as a Portfolio Manager of Davis Global Fund
since its December 22, 2004 inception, and also manages other equity funds
advised by Davis Advisors. Ms. Pouschine joined Davis Advisors in July
2003. From 1993 to 2003, Ms. Pouschine worked as an analyst and portfolio
manager at Ruane, Cunniff.

o DANTON GOEI has served as a Portfolio Manager of Davis Global Fund since
its December 22, 2004 inception, and also manages other equity

PROSPECTUS o DAVIS GLOBAL FUND o 15

funds advised by Davis Advisors. Mr. Goei joined Davis Advisors in November
1998.

o CHIP TUCKER, CFA, has served as a Portfolio Manager of Davis Global Fund
since its December 22, 2004 inception, and also manages other equity funds
advised by Davis Advisors. Mr. Tucker joined Davis Advisors in April 2002.
Previously he served as a portfolio manager for US Trust Company from April
2001 to April 2002 and as a portfolio manager for Desai Capital Management,
Inc., from April 1998 to March 2001.

o KENT WHITAKER has served as a Portfolio Manager of Davis Global Fund since
its December 22, 2004 inception, and also manages other equity funds
advised by Davis Advisors. Mr. Whitaker joined Davis Advisors in August
2000 and served Amoco Corp. and BP PLC in a variety of general management
and financial management positions from 1989 until August 2000.

PROSPECTUS o DAVIS GLOBAL FUND o 16

ONCE YOU INVEST
IN DAVIS FUNDS
--------------------------------------------------------------------------------

This section describes how your investment is valued, how you earn money on your
investment and how the government may tax these earnings.

HOW YOUR SHARES ARE VALUED

Once you open your Davis Funds account, you may buy or sell shares on any
business day. The price of your shares in a Davis Fund is based upon the total
value of the Fund's investments. Your account balance may change daily because
the share price may change daily.

The value of one share of a Davis Fund, also known as the net asset value, or
NAV, is calculated at 4 p.m. on each day the New York Stock Exchange is open or
as of the time the Exchange closes, if earlier.

The business sections of many, but not all, major newspapers publish Davis
Funds' net asset values. If you have access to the Internet, you can also check
the net asset value on our website (www.davisfunds.com).

VALUATION OF PORTFOLIO SECURITIES

Your shares will be purchased at the net asset value, or sold at the net asset
value next determined after Davis Funds' transfer agent receives and accepts
your request. A contingent deferred sales charge may apply at the time you sell.

Securities are valued primarily on the basis of market quotations. However,
Davis Funds have adopted procedures for making "fair value" determinations if
market quotations are not readily available. The Fund uses fair value prices any
time the Adviser concludes that reliable market quotations for its portfolio
securities are not readily available from an approved third party pricing
service or from independent brokers. Examples of when fair value pricing may be
used include illiquid or thinly traded securities, and securities whose values
have been affected by a significant event occurring after the close of their
primary markets. Davis Funds use an independent vendor to assist in fair value
pricing of foreign securities when the market displays significant volatility.
The use of fair

PROSPECTUS o DAVIS GLOBAL FUND o 17

value pricing by the Fund may cause the net asset value of its shares to differ
significantly from the net asset value that would be calculated using last
reported prices.

Davis Global Fund makes significant investments in foreign securities. Some of
the Fund's securities may be traded in markets that close at a different time
than when the Fund's shares are priced. Events affecting portfolio values that
occur after the time that such markets close and the time Fund's shares are
priced may result in the use of fair value pricing, as described above.
Likewise, because foreign securities trade in markets and exchanges that operate
on U.S. holidays and weekends, the value of some of the Fund's foreign
investments might change significantly on those days when investors cannot buy
or redeem shares. Davis Funds have adopted procedures designed to identify and
react to significant events in foreign markets that would have a material effect
on a Fund's net asset value. Notwithstanding, the net asset value of a Fund's
shares may change on days when shareholders will not be able to purchase or
redeem Fund shares.

Securities denominated in foreign currencies and traded in foreign markets will
have their value converted into U.S. dollar equivalents at the prevailing
exchange rate as computed by State Street Bank and Trust. Fluctuation in the
value of foreign currencies in relation to the U.S. dollar may affect the net
asset value of a Fund's shares even if there has not been any change in the
foreign currency price of that Fund's investments.

PORTFOLIO HOLDINGS

A description of the Fund's policies and procedures with respect to the
disclosure of the Fund's portfolio holdings is available in the Fund's Statement
of Additional Information.

Currently, only the directors, officers and employees of the Davis Funds or its
investment adviser and sub-adviser (and affiliated companies) are eligible to
purchase shares of Davis Global Fund. The Fund does not make its portfolio
holdings publicly available except through filings on the SEC website. The Fund
files its portfolio holdings with the SEC four times a year, 60 days after the
end of each of the Fund's fiscal quarters. These filings may be viewed on the
SEC's website.

PROSPECTUS o DAVIS GLOBAL FUND o 18

HOW WE PAY EARNINGS

There are two ways you can receive payments from the Davis Fund you invest in:

o DIVIDENDS. Dividends are distributions to shareholders of net investment
income and short-term capital gains on investments.

o CAPITAL GAINS. Capital gains are profits received by a Fund from the sale
of securities held for the long term, which are then distributed to
shareholders.

If you would like information about when a particular Davis Fund pays dividends
and distributes capital gains, please call 1-800-279-0279. Unless you choose
otherwise, the Davis Funds will automatically reinvest your dividends and
capital gains in additional Fund shares.

You can request to have your dividends and capital gains paid to you by check,
deposited directly into your bank account, paid to a third party or sent to an
address other than your address of record.

We also offer a DIVIDEND DIVERSIFICATION PROGRAM, which allows you to have your
dividends and capital gains reinvested in shares of another Davis Fund.

You will receive a statement each year detailing the amount of all dividends and
capital gains paid to you during the previous year. To ensure that these
distributions are reported properly to the U.S. Treasury, you must certify on
your Davis Funds Application Form or on IRS Form W-9 that your Taxpayer
Identification Number is correct and you are not subject to backup withholding.
If you are subject to backup withholding, or you did not certify your Taxpayer
Identification Number, the IRS requires the Davis Funds to withhold a percentage
of any dividends paid and redemption or exchange proceeds received.

HOW TO PUT YOUR DIVIDENDS AND CAPITAL GAINS TO WORK

You can have all of your dividends and capital gains automatically invested in
the same Fund or the same share class of any other Davis Fund. To be eligible
for this DIVIDEND DIVERSIFICATION PROGRAM, all accounts involved must be
registered under the same name and same class of shares and have a minimum
initial value of $1,000. Shares are

PROSPECTUS o DAVIS GLOBAL FUND o 19

purchased at the chosen Fund's net asset value on the dividend payment date. You
can make changes to your selection or withdraw from the program with ten days'
notice. To participate in this program, fill out the cross-reinvest information
in the appropriate section of the Application Form. If you wish to establish
this program after your account has been opened, call for more information.

FEDERAL INCOME TAXES

TAXES ON DISTRIBUTIONS

Distributions you receive from the Fund may be subject to income tax and may
also be subject to state or local taxes unless you are exempt from taxation.

For federal tax purposes, any taxable dividends and distributions of short-term
capital gains are treated as ordinary income. The Fund's distributions of net
long-term capital gains are taxable to you as long-term capital gains. Any
taxable distributions you receive from a fund will normally be taxable to you
when made, regardless of whether you reinvest distributions or receive them in
cash.

Davis Funds will send you a statement each year showing the tax status of all
your distributions.

TAXES ON TRANSACTIONS

Your redemptions, including exchanges, may result in a capital gain or loss for
federal tax purposes. A capital gain or loss on your investment is the
difference between the cost of your shares, including any sales charges, and the
price you receive when you sell them.

More information concerning federal taxes is available in the Statement of
Additional Information. We recommend that you consult with a tax advisor about
dividends and capital gains that may be received from the Davis Funds.

FEES AND EXPENSES OF THE FUND

The Fund must pay operating fees and expenses.

PROSPECTUS o DAVIS GLOBAL FUND o 20

MANAGEMENT FEE

The management fee covers the normal expenses of managing the Fund, including
compensation, research costs, corporate overhead expenses and related expenses.
The difference in the fee structures between the classes is primarily the result
of their separate arrangements for shareholder and distribution services and is
not the result of any difference in the amounts charged by Davis Advisors for
core investment advisory services. Accordingly, the core investment advisory
expenses do not vary by class. Different fees and expenses will affect
performance.

12B-1 FEES

The Davis Funds have Plans of Distribution or "12b-1 Plans" under which the
Funds may finance activities to sell shares. The 12b-1 Plans provide for annual
distribution expenses of up to 0.25% of the average daily net asset value of the
Class A shares; and up to the lesser of 1.25% of the average daily net asset
value of the Class B or C shares or the maximum amount provided by applicable
rule or regulation of the National Association of Securities Dealers, which is
1.00% at present.

For all share classes, up to 0.25% of distribution expenses may be used to pay
service fees to qualified dealers providing certain shareholder services.
Because distribution expenses are paid out of a Fund's assets on an ongoing
basis, these fees will increase the cost of your investment over time and may
cost you more than paying other types of sales charges. Thus, the higher fees
for Class B and C shares may cost you more over time than paying the initial
sales charge for Class A shares.

OTHER EXPENSES

Other expenses include miscellaneous fees from affiliated and outside service
providers. These fees may include legal, audit, custodial, the printing and
mailing of reports and statements, automatic reinvestment of distributions and
other conveniences, and payments to third parties that provide recordkeeping
services or administrative services for investors in the Fund.

PROSPECTUS o DAVIS GLOBAL FUND o 21

TOTAL FUND OPERATING EXPENSES

The total cost of running a mutual fund is reflected in its expense ratio. A
shareholder does not pay operating costs directly; instead, operating costs are
taken out before the Fund's NAV is calculated and are expressed as a percentage
of the Fund's average daily net assets. The effect of these fees is reflected in
the performance results for that Class of shares. Investors should examine them
closely in the prospectus, especially when comparing one fund with another fund
in the same investment category.

OTHER COMPENSATION PAID TO DEALERS AND OTHER FINANCIAL INTERMEDIARIES

The Distributor for the Davis Funds, Davis Distributors, LLC (the
"Distributor"), makes substantial payments to qualifying dealers who sell Davis
Funds' shares. Qualifying dealers may receive: (i) sales commissions from sales
charges paid by purchasing shareholders; (ii) distribution and service fees from
the Funds' 12b-1 distribution plans; (iii) record-keeping fees from the Funds
for providing services to investors who hold Davis Funds shares through
dealer-controlled omnibus accounts; and (iv) other compensation, described
below, paid by the Distributor from its own resources, which may include
resources derived from management fees paid to the Advisor by the Davis Funds
and other clients.

Other compensation paid by the Distributor from its own resources may include:
(i) marketing support payments including business planning assistance, educating
personnel about the Davis Funds, and shareholder financial planning needs,
placement on the dealer's list of offered funds, and access to sales meetings,
sales representatives and management representatives of the dealer; and (ii)
financial assistance paid to dealers that enable the Distributor to participate
in and/or present at conferences or seminars, sales or training programs for
invited registered representatives and other employees, client and investor
events and other dealer-sponsored events. A number of factors are considered in
determining payments, including the dealer's sales and assets, and the quality
of the dealer's relationship with the Distributor.

The Distributor routinely sponsors due diligence meetings for registered
representatives during which they receive updates on various Davis Funds and are
afforded the opportunity to speak with portfolio managers. Invitation to these
meetings is not conditioned on selling a specific number

PROSPECTUS o DAVIS GLOBAL FUND o 22

of shares. Those who have shown an interest in Davis Funds, however, are more
likely to be considered. To the extent permitted by their firm's policies and
procedures, registered representatives' expenses in attending these meetings may
be covered by the Distributor.

The Distributor may offer other compensation to the extent not prohibited by
state or federal laws, the Securities and Exchange Commission, or any
self-regulatory agency, such as the NASD. The Statement of Additional
Information provides more information concerning these payments. Investors
should consult their financial intermediary regarding the details of the
payments they may receive in connection with the sale of Davis Fund shares.

PROSPECTUS o DAVIS GLOBAL FUND o 23

HOW TO
CHOOSE A SHARE CLASS
--------------------------------------------------------------------------------

Before you can buy shares in any Davis Fund, you need to decide which class of
shares best suits your needs. Davis Funds offers four classes of shares: A, B, C
and Y. Each class is subject to different expenses and sales charges. Class Y
shares are offered through a separate prospectus. Class Y shares are generally
available only to qualified institutional investors.

You may choose to buy one class of shares rather than another depending on the
amount of the purchase and the expected length of time of investment. Long-term
shareholders of Class B or C shares may pay more than the maximum front-end
sales charge allowed by the National Association of Securities Dealers.

CLASS A SHARES

Class A shares may be best for you if you are a long-term investor who is
willing to pay the entire sales charge at the time of purchase. In return, you
pay a lower distribution fee than the other two share classes:

o For any investment below $100,000, you buy Class A shares at their net
asset value per share plus a sales charge, which is 4.75% of the offering
price (see chart following). The term "offering price" includes the
front-end sales charge.

o There is no limit to how much you can invest in this share class.

o Davis Funds (other than Davis Government Money Market Fund) pay a
distribution fee--up to 0.25% of the average daily net assets--each year
you hold the shares. This fee is lower than the fee you pay for the other
two classes of shares. Lower expenses of Class A shares translate into
higher annual return on net asset value than Class B or C shares.

PROSPECTUS o DAVIS GLOBAL FUND o 24

CLASS A SHARES SALES CHARGES
for all Davis Funds except Davis Government Money Market Fund

----------------------- ------------------ ------------------ ------------------
SALES CHARGE SALES CHARGE AMOUNT OF SALES
AMOUNT OF PURCHASE percentage of approximate CHARGE RETAINED
offering price percentage of BY DEALER
net amount percentage of
invested offering price
----------------------- ------------------ ------------------ ------------------
Under $100,000 4.75% 5.00% 4.00%
----------------------- ------------------ ------------------ ------------------
$100,000 - 3.50% 3.60% 3.00%
$250,000
----------------------- ------------------ ------------------ ------------------
$250,000 - 2.50% 2.60% 2.00%
$500,000
----------------------- ------------------ ------------------ ------------------
$500,000 - 2.00% 2.04% 1.75%
$750,000
----------------------- ------------------ ------------------ ------------------
$750,000 - 1.00% 1.01% 0.75%
$1 million
----------------------- ------------------ ------------------ ------------------
$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% may be
deducted from the redemption proceeds.

The Distributor may pay the dealer of record commissions (on Davis Funds other
than Davis Government Money Market Fund) on purchases at the annual rate
described in the table below. Commissions may be paid on either: (i) Class A
purchases of $1 million or more, or (ii) Class A purchases (net of redemptions)
in retirement plans which qualify for sales at net asset value. The commission
will be paid only on purchases that were not previously subject to a front-end
sales charge or dealer concession.

---------------------------- -----------------
PURCHASE AMOUNT COMMISSION
---------------------------- -----------------
First $3 million 0.75%
---------------------------- -----------------
Next $2 million 0.50%
---------------------------- -----------------
More than $5 million 0.25%
---------------------------- -----------------

The Fund may reimburse the Distributor for these payments through its Plans of
Distribution. If distribution fee limits already have been reached for the year,
the Distributor itself will pay the commissions.

PROSPECTUS o DAVIS GLOBAL FUND o 25

REDUCTION OF CLASS A SHARES INITIAL SALES CHARGE

As the chart above shows, the sales charge gets smaller as your purchase amount
increases. There are several ways you may combine purchases to qualify for a
lower sales charge. To receive a reduction in your Class A initial sales charge,
you must let your dealer or Davis Funds know at the time you purchase shares
that you qualify for such a reduction. If you do not let your dealer or Davis
Funds know you are eligible for a reduction, you may not receive a sales charge
discount to which you are otherwise entitled. To qualify for a reduction in
Class A shares initial sales charge you must provide records (generally account
statements are sufficient; your broker may require additional documents) of all
Davis Funds shares owned which you wish to count towards the sales charge
reduction.

YOU CAN COMBINE PURCHASES OF CLASS A SHARES

o WITH OTHER FAMILY MEMBERS. To receive a reduced Class A sales charge,
investments made by you and your immediate family (yourself, your spouse,
and any children under the age of 21) may be aggregated if made for your
own account(s) and/or certain other accounts, such as:

a) trust accounts established by the above individuals. However, if the
person(s) who established the trust is deceased, then the trust
account may only be aggregated with accounts of the primary
beneficiary of the trust;

b) solely controlled business accounts; or

c) single-participant retirement plans.

o THROUGH EMPLOYEE BENEFIT PLANS. If you buy shares through trust or
fiduciary accounts and Individual Retirement Accounts (IRAs) of a single
employer, the purchases will be treated as a single purchase.

o UNDER A STATEMENT OF INTENTION. If you enter a Statement of Intention and
agree to buy Class A shares of $100,000 or more over a thirteen-month
period, all of the shares you buy during that period will be counted as a
single purchase, with the exception of purchases into Davis Government
Money Market Fund. Before entering a Statement of Intention, please read
the terms and conditions in the Statement of Additional Information. Under
a Statement of Intention, you agree to permit our service provider, State
Street Bank and Trust, to hold fund shares in escrow to guarantee payment
of any sales charges that may

PROSPECTUS o DAVIS GLOBAL FUND o 26

be due if you ultimately invest less than you agreed to invest over the
covered thirteen-month period.

o UNDER RIGHTS OF ACCUMULATION. If you notify your dealer or our Distributor,
you can include the Class A, B and C shares in Davis Funds you already own
(excluding shares in Davis Government Money Market Fund) when calculating
the price for your current purchase. These shares are valued at current
offering price value to determine whether or not you qualify for a
reduction in the sales charge.

For more information about how to reduce Class A shares initial sales charge,
please visit Davis Funds' website free of charge at www.davisfunds.com, (which
includes additional information in a clear and prominent format that includes
hyperlinks), consult your broker, or financial intermediary, or refer to the
Fund's Statement of Additional Information which is available through your
financial intermediary or from the Fund by calling shareholder services at
1-800-279-0279.

CLASS A SHARES FRONT-END SALES CHARGE WAIVERS

We do not impose a sales charge on purchases of Class A shares for:

o Investments in Davis Government Money Market Fund.

o Shareholders making purchases with dividends or capital gains that are
automatically reinvested.

o Directors, officers and employees of any Davis Fund, the investment adviser
of any Davis Fund or its affiliates, and their immediate families.

o Employees and people affiliated with broker-dealer firms offering shares in
any Davis Fund.

o Financial institutions acting as fiduciaries making single purchases of
$250,000 or more.

o Employee benefit plans making purchases through a single account covering
at least fifty participants.

o Wrap accounts offered by securities firms, fee-based investment advisers or
financial planners.

o State and local governments.

o Shareholders making purchases in certain accounts offered by securities
firms that have entered into contracts with the Davis Funds and which
charge fees based on assets in the account.

PROSPECTUS o DAVIS GLOBAL FUND o 27

CLASS B SHARES

Class B shares may be best for you if you are willing to pay a higher
distribution fee than Class A shares for eight years in order to avoid paying a
front-end sales charge:

o You buy the shares at net asset value (no initial sales charge).

o You can invest up to $100,000 in Class B shares.

o If you sell Class B shares in any of the Davis Funds (other than Davis
Government Money Market Fund) within six years of purchase, you must pay a
deferred sales charge. This charge decreases over time as you own the
shares (see chart following). At redemption, the deferred sales charge for
each purchase will be calculated from the date of purchase, excluding any
time the shares were held in a money market fund.

o After you hold Class B shares for eight years, they are converted
automatically into Class A shares without incurring a front-end sales
charge. Investors in Class A shares pay a lower distribution fee.

o Investors in Class B shares (other than Davis Government Money Market Fund)
pay a distribution fee of one percent of the average daily net asset value
each year they hold the shares. Higher expenses translate into lower annual
return on net asset value.

Note: Investors who buy Class B shares of Davis Government Money Market Fund
will not pay deferred sales charges unless the money market fund shares were
received in exchange for shares of other Davis Funds (see "Exchanging Shares").

CLASS B SHARES DEFERRED SALES CHARGES
for all Davis Funds except Davis Government Money Market Fund

--------------------------------- -----------------------------------------
SALES MADE AFTER PURCHASE AMOUNT OF DEFERRED SALES CHARGE
--------------------------------- -----------------------------------------
Year 1 4%
--------------------------------- -----------------------------------------
Years 2-3 3%
--------------------------------- -----------------------------------------
Years 4-5 2%
--------------------------------- -----------------------------------------
Year 6 1%
--------------------------------- -----------------------------------------
Years 7-8 None
--------------------------------- -----------------------------------------

PROSPECTUS o DAVIS GLOBAL FUND o 28

CLASS C SHARES

Class C shares may be best for you if you are willing to pay a higher
distribution fee than Class A shares in order to avoid paying a front-end sales
charge:

o You buy the shares at net asset value (no initial sales charge).

o You cannot invest more than $1 million in Class C shares.

o If you sell Class C shares in any of the Davis Funds (other than Davis
Government Money Market Fund) within one year of purchase, you must pay a
deferred sales charge of one percent. At redemption, the deferred sales
charge for each purchase will be calculated from the date of purchase,
excluding any time the shares were held in a money market fund.

o Investors in Class B or C shares (other than Davis Government Money Market
Fund) pay a distribution fee of one percent of the average daily net asset
value each year they hold the shares. Higher expenses translate into lower
annual return on net asset value.

DEFERRED SALES CHARGE

If you purchase shares subject to a contingent deferred sales charge and redeem
any of those shares during the applicable holding period for the class of shares
you own, the contingent deferred sales charge will be deducted from the
redemption proceeds unless you are eligible for one of the waivers described
below. At redemption, the deferred sales charge will be calculated from the
first day of the month after initial purchase, excluding any time that shares
were held in a money market fund. You will pay a deferred sales charge in the
following cases:

o As a Class A shareholder, only if you buy shares valued at $1 million or
more without a sales charge and sell the shares within one year of
purchase.

o As a Class B shareholder, if you sell shares within six years of purchase.
The percentage decreases over the six-year period.

o As a Class C shareholder, if you sell shares within one year of purchase.

To keep deferred sales charges as low as possible, we first will sell shares in
your account that are not subject to deferred sales charges (if any). We do not
impose a deferred sales charge on the amount of your account value represented
by an increase in net asset value over the initial

PROSPECTUS o DAVIS GLOBAL FUND o 29

purchase price, or on shares acquired through dividend reinvestments or capital
gains distributions. To determine whether the deferred sales charge applies to a
redemption, we redeem shares in the following order:

o Shares in your account represented by an increase in NAV over the initial
purchase price (appreciation).

o Shares acquired by reinvestment of dividends and capital gain
distributions.

o Shares that are no longer subject to the deferred sales charge.

o Shares held the longest, but which are still subject to the deferred sales
charge.

Note: Investors who buy Class C shares of Davis Government Money Market Fund
will not pay deferred sales charges unless the money market fund shares were
received in exchange for shares of other Davis Funds (see "Exchanging Shares").

DEFERRED SALES CHARGE WAIVERS

We will waive deferred sales charges on sales of Class A, B and C shares of any
Davis Fund if:

o You sell Class A shares that were not subject to a commission at the time
of purchase (the amount of purchase totaled $1 million or more) and the
shares were held for more than a year.

o You die and are the sole owner of the account. Otherwise, shares can be
redeemed without a contingent deferred sales charge following the death or
disability of the last surviving shareholder, including a trustee of a
grantor trust or revocable living trust for which the trustee is also the
sole beneficiary. The death or disability must have occurred after the
account was established. If you claim a disability you must provide
evidence of a determination of disability by the Social Security
Administration.

o You sell shares under a qualified retirement plan or IRA that constitutes a
tax-free return of excess contributions to avoid a penalty.

o Your Fund redeems the remaining shares in your account under an Involuntary
Redemption.

o You qualify for an exception related to defined contribution plans. These
exceptions are described in the Statement of Additional Information.

o You are a director, officer or employee of Davis Advisors or one of its
affiliates (or a family member of a director, officer or employee).

PROSPECTUS o DAVIS GLOBAL FUND o 30

o You sell shares under the Automatic Withdrawal Plan if the aggregate value
of the redeemed shares does not exceed twelve percent of the account's
value.*

If the net asset value of the shares that you sell has increased since you
purchased them, any deferred sales charge will be based on the original cost of
the shares.

* An Automatic Withdrawal Plan may be established as either a percentage or a
fixed-dollar amount. The shares that may be redeemed without a sales charge are
recalculated as a percentage of the current market value of the account as of
the date of each withdrawal. If established as a percentage, no sales charge
will be incurred regardless of market fluctuations. If established as a
fixed-dollar amount, a sales charge may be incurred if the market value of the
account decreases. If you redeem shares in addition to those redeemed pursuant
to the Automatic Withdrawal Plan, a deferred sales charge may be imposed on
those shares and on any subsequent redemptions within a twelve-month period,
regardless of whether such redemptions are pursuant to an Automatic Withdrawal
Plan.

If you have any additional questions about choosing a share class, please
call us toll free at 1-800-279-0279 during business hours, 9 a.m. to 6 p.m.
Eastern Time. If you still are not sure about which class is best for you,
contact your financial adviser.

PROSPECTUS o DAVIS GLOBAL FUND o 31

HOW TO
OPEN AN ACCOUNT
--------------------------------------------------------------------------------

You can open an account if you initially invest at least $1,000 per fund.

THREE WAYS YOU CAN OPEN AN ACCOUNT

o BY MAIL. Fill out the Application Form and mail it to our service provider,
State Street Bank and Trust. You must sign the Application Form. Include a
check made payable to DAVIS FUNDS or, in the case of a retirement account,
the custodian or trustee. All purchases by check should be in U.S. dollars.
DAVIS FUNDS WILL NOT ACCEPT THIRD-PARTY CHECKS, STARTER CHECKS, TRAVELER'S
CHECKS OR MONEY ORDERS.

o BY DEALER. You may have your dealer order and pay for the shares. In this
case, you must pay your dealer directly. Your dealer will then order the
shares from our Distributor. Please note that your dealer may charge a
service fee or commission for these transactions.

o BY WIRE. You may wire federal funds directly to our service provider, State
Street Bank and Trust. Before you wire an initial investment, you must call
the Distributor and obtain an account number and Application Form. A
customer service representative will assist you with your initial
investment by wire. After the initial wire purchase is made, you will need
to return the Application Form to State Street Bank and Trust. To ensure
that the purchase is credited properly, follow these wire instructions:

State Street Bank and Trust Company
Boston, MA 02210
Attn: Mutual Fund Services
[NAME OF DAVIS FUND AND CLASS OF SHARES THAT YOU ARE BUYING]
Shareholder Name
Shareholder Account Number
Federal Routing Number 011000028
DDA Number 9904-606-2

PROSPECTUS o DAVIS GLOBAL FUND o 32

ANTI-MONEY LAUNDERING COMPLIANCE

Davis Funds and the Distributor are required to comply with various anti-money
laundering laws and regulations. Consequently, the Funds or the Distributor may
request additional information from you to verify your identity and source of
funds. If you do not provide the information, the Davis Funds may not be able to
open your account. If at any time the Funds believe an investor may be involved
in suspicious activity or if certain account information matches information on
government lists of suspicious persons, they may choose not to establish a new
account or may be required to "freeze" a shareholder's account. They may also be
required to provide a government agency or another financial institution with
information about transactions that have occurred in a shareholder's account or
to transfer monies received to establish a new account, transfer an existing
account or transfer the proceeds of an existing account to a governmental
agency. In some circumstances, the law may not permit the Funds or the
Distributor to inform the shareholder that it has taken the actions described
above.

RETIREMENT PLAN ACCOUNTS

You can invest in Davis Funds using any of these types of retirement plan
accounts:

o IRAs o Simple IRAs

o Roth IRAs o Simplified Employee Pension
(SEP) IRAs
o Coverdell Education Savings
Accounts o 403(b) Plans

State Street Bank and Trust acts as custodian (service provider) for the
retirement plans and charges the participant a $15 maintenance fee each year
regardless of the number of plans established per Social Security Number. This
fee will be waived for accounts sharing the same Social Security Number if the
accounts total at least $50,000 at Davis Funds. This maintenance fee is
automatically deducted from each account unless you elect to pay the fee
directly. There is also a $15 fee for closing retirement plan accounts. To open
a retirement plan account, you must fill out a special application form. You can
request this form by calling the Distributor.

PROSPECTUS o DAVIS GLOBAL FUND o 33

HOW TO
BUY, SELL AND EXCHANGE SHARES
--------------------------------------------------------------------------------

Once you have established an account with Davis Funds, you can add to or
withdraw from your investment. This prospectus describes the types of
transactions you can perform as a Davis Funds shareholder including how to
initiate these transactions and the charges that you may incur (if any) when
buying, selling or exchanging shares. A transaction will not be executed until
all required documents have been received in a form meeting all legal
requirements. Legal requirements vary depending upon the type of transaction and
the type of account. Call Shareholder Services for instructions. These
procedures and charges may change over time and the prospectus in effect at the
time a transaction is initiated will determine the procedures and charges which
will apply to the transaction.

RIGHT TO REJECT OR RESTRICT ANY PURCHASE OR EXCHANGE ORDER

Purchases and exchanges should be made for investment purposes only. Davis Funds
and the Distributor reserve the right to reject or restrict any purchase or
exchange order for any reason. Davis Funds are not designed to serve as a
vehicle for frequent trading in response to short-term fluctuations in the
securities markets. Accordingly, purchases or exchanges that are part of
activity that Davis Funds or the Distributor have determined may involve actual
or potential harm to a Fund may be rejected.

THREE WAYS TO BUY, SELL AND EXCHANGE SHARES

o BY TELEPHONE. Call 1-800-279-0279. You can speak directly with a Davis
Funds representative during our business hours (9 a.m. to 6 p.m. Eastern
Time) or use our automated telephone system at any time, day or night.

o BY MAIL. Send the request to our service provider, State Street Bank and
Trust Company.

Regular mail:
State Street Bank and Trust Company
c/o Davis Funds
P.O. Box 8406, Boston, MA 02266-8406

PROSPECTUS o DAVIS GLOBAL FUND o 34

Express shipping:
State Street Bank and Trust Company
c/o Davis Funds
66 Brooks Drive, Braintree, MA 02184

o BY DEALER. Contact a dealer who then will make the transaction through our
Distributor. Please note that your dealer may charge a service fee or
commission for these transactions.

The Davis Funds do not issue certificates for any class of shares. Instead,
shares purchased are automatically credited to an account maintained for you on
the books of the Davis Funds by State Street Bank and Trust. Transactions in the
account, such as additional investments, will be reflected on regular
confirmation statements from the Transfer Agent. Dividend and capital gain
reinvestments, purchases through automatic investment plans and certain
retirement plans, and automatic exchanges and withdrawals will be confirmed at
least quarterly.

WHEN YOUR TRANSACTIONS ARE PROCESSED

The per-share price for purchases or sales made through our Distributor will be
processed on the same day if the order is received before 4 p.m. Eastern Time.
If State Street Bank and Trust requires additional documents to complete the
purchase or sale, the transaction price will be determined at the close of
business after all required documents are received.

For your transaction to be counted on the day you place your order with your
broker-dealer or other financial institution, they must:

o Receive your order before 4 p.m. Eastern Time.

o Promptly transmit the order to State Street Bank and Trust.

BUYING MORE SHARES

You may buy more shares at any time, by mail or through a dealer. The minimum
purchase amount is $25.

When you purchase shares by mail, send a check made payable to DAVIS FUNDS for
the amount of purchase to our service provider, State Street Bank and Trust. If
you have the purchase form from your most recent

PROSPECTUS o DAVIS GLOBAL FUND o 35

statement, include it with the check. If you do not have a purchase form,
include a letter with your check stating the name of the Fund, the class of
shares you wish to buy and your account number.

When you buy shares through a dealer, you may be charged a service fee or
commission for these transactions.

MAKING AUTOMATIC INVESTMENTS

An easy way to increase your investment in any Davis Fund is to sign up for the
AUTOMATIC INVESTMENT PLAN. Under this plan, you arrange for a set amount of
money to be taken from your bank account and invested in Fund shares. The
minimum amount you can invest under the plan each month is $25. The account
minimum of $1,000 must be met prior to establishing an automatic investment
plan. The account minimum of $1,000 will be waived if you meet the $1,000
minimum requirement within one year and purchases are made automatically every
month through your employer as part of a qualified plan.

Purchases can be processed electronically on any day of the month between the
5th and 28th if the institution that services your bank account is a member of
the Automated Clearing House system. The debit should show up on your next bank
statement.

To sign up for the Automatic Investment Plan, fill out the appropriate section
of the Application Form. If you wish to establish this plan after your account
has been opened, you must submit a letter of instruction signed by the account
owner(s). You can stop automatic investments at any time by calling the
Distributor.

You can also use our Dividend Diversification Program to buy more shares in any
Davis Fund. See "Once You Invest in Davis Funds."

Note: The Automated Clearing House system is used by most banks for electronic
transfers of money into and out of your bank account and is regulated by the
Federal Reserve.

PROSPECTUS o DAVIS GLOBAL FUND o 36

SELLING SHARES

You may sell back all or part of your shares in any Davis Fund in which you
invest (known as a redemption) on any business day at net asset value minus any
sales charges (or redemption fees) that may be due. You can sell the shares by
telephone, by internet, by mail or through a dealer.

When you sell shares by mail, indicate the number of shares or the dollar amount
you wish to redeem and send the request to our service provider, State Street
Bank and Trust. If more than one person owns the shares you wish to sell, all
owners must sign the redemption request. You may be required to have the owners'
signatures medallion-guaranteed (see "Medallion Signature Guarantee" below).

When you sell shares through a dealer, you may be charged a service fee or
commission for these transactions.

Redemption proceeds are usually paid to you by check within seven days after
State Street Bank and Trust receives your proper sale request. You may redeem
shares on any business day. Redemption proceeds may be withheld until a
sufficient period of time has passed for State Street Bank and Trust to be
reasonably sure that all checks or drafts (including certified or cashier's
checks) for shares purchased have cleared, normally not exceeding fifteen
calendar days.

SHORT-TERM TRADING FEE. The Fund will deduct a short-term trading fee from the
redemption amount if you sell or exchange your shares after holding them for
less than 30 days. This redemption fee will equal 2% of the amount redeemed and
shares held longest will be treated as being redeemed first and the shares held
shortest will be treated as being redeemed last. For shares of the Fund acquired
by exchange, the holding period prior to the exchange is not considered in
determining whether to apply the redemption fee. The short-term trading fee is
paid to the Fund and are designed to offset the brokerage commissions, market
impact, and other costs associated with fluctuations in fund asset levels and
cashflows caused by short-term trading. There are limited exceptions to the
short-term trading fee for investors which invest through third-party
intermediaries and it is not practical to impose the fee. See the Statement of
Additional Information for a description of these exceptions.

PROSPECTUS o DAVIS GLOBAL FUND o 37

CHECK WRITING PRIVILEGE FOR DAVIS GOVERNMENT MONEY MARKET FUND

You can request the ability to use your Davis Government Money Market Fund
account as a checking account if you hold Class A shares and are not investing
through a retirement plan or an IRA. Davis Government Money Market Fund
investors with check writing privileges can write checks:

a) For $250 or more from their accounts. Checks written for less than
$250 will be honored and a $20 service free will be debited from the
account;

b) So long as the account balance is at least $1,000 after the check has
been paid. If a check is presented for payment which would bring the
account balance to less than $1,000 a $20 service fee will be debited
from the account and check writing privileges may be suspended; and

c) Subject to the rules prescribed by State Street Bank and Trust. The
Funds and State Street Bank and Trust reserve the right to modify
these rules at any time.

Writing a check is a way of selling shares and directing the proceeds to a third
party. When a Davis Government Money Market Fund check is presented to State
Street Bank and Trust for payment, the bank will redeem a sufficient number of
shares in your account to cover the amount of the check. If you have had recent
activity in your Davis Government Money Market Fund account, funds may not be
available to cover your checks. For example: (1) If you have redeemed or
exchanged funds out of your Davis Government Money Market Fund account, there
may not be sufficient funds remaining to cover your check; (2) If you have
recently purchased shares in your Davis Government Money Market Fund account,
the funds may still be within the fifteen-day uncollected status; or (3) If
funds were exchanged into your Davis Government Money Market Fund account from
another Davis Fund, those funds may still be within the fifteen-day uncollected
status.

To qualify for CHECK WRITING PRIVILEGES, fill out the appropriate section in
your Application Form.

PROSPECTUS o DAVIS GLOBAL FUND o 38

If you write a check on your Davis Government Money Market Fund account and you
do not have sufficient shares in your account to cover the check, or if your
check is presented for payment before your purchase check has cleared, the check
will be returned and your account will be assessed an insufficient funds fee of
$20.00. You can find more information about check writing privileges in the
Statement of Additional Information. Davis Funds and State Street Bank and Trust
reserve the right to modify or terminate the check writing service at any time.

WHAT YOU NEED TO KNOW BEFORE YOU SELL YOUR SHARES

o You will always receive cash for sales that total less than $250,000 or one
percent of a Fund's net asset value during any ninety-day period. Any sales
above the cash limit may be paid in securities and would mean you would
have to pay brokerage fees if you sold the securities.

o You will need a medallion signature guarantee on a stock power or
redemption request for sales paid by check totaling more than $100,000.
However, if your address of record has changed in the last thirty days, or
if you wish to send redemption proceeds to a third party, you will need a
medallion signature guarantee for all sales.

o In the past, the Davis Funds issued certificates. If a certificate was
issued for the shares you wish to sell, the certificate must be sent by
certified mail to State Street Bank and Trust and accompanied by a letter
of instruction signed by the owner(s).

o A sale may produce a gain or loss. Gains may be subject to tax.

o The Securities and Exchange Commission may suspend redemption of shares
under certain emergency circumstances if the New York Stock Exchange is
closed for reasons other than customary closings and holidays.

MEDALLION SIGNATURE GUARANTEE

To protect you and the Davis Funds against fraud, certain redemption requests
must be made in writing with your signature guaranteed. A medallion signature
guarantee is a written endorsement from an eligible guarantor institution that
the signature(s) on the written request is (are) valid. Certain commercial
banks, trust companies, savings associations, credit unions and members of a
United States stock exchange participate in the medallion signature guarantee
program. No other form of signature verification will be accepted.

PROSPECTUS o DAVIS GLOBAL FUND o 39

STOCK POWER

This is a letter of instruction signed by the owner of the shares that gives
State Street Bank and Trust permission to transfer ownership of the shares to
another person or group. Any transfer of ownership requires that all
shareholders have their signatures medallion-guaranteed.

When you make a sale or withdrawal, a deferred sales charge may be imposed
if:

o You buy $1 million or more of Class A shares and sell them within a
year of purchase.

o You sell Class B shares within six years of purchase.

o You sell Class C shares within one year of purchase.

When you make a sale, withdrawal, or exchange within 30 days of their purchase a
short-term trading fee may be imposed.

IF YOU DECIDE TO BUY BACK SHARES YOU SOLD

If you sold Class A or Class B shares on which you have paid a sales charge
(other Classes of shares are not entitled to this privilege) and decide to
repurchase some or all shares within sixty days of sale, you may notify us in
writing of your intent to exercise the SUBSEQUENT REPURCHASE PRIVILEGE. This
privilege can only be exercised once. With this privilege you may purchase Class
A shares at current net asset value without a sales charge. If you redeemed
Class B shares and paid a contingent deferred sales charge on redemption, it
will not be refunded or returned to your account. You may purchase Class A
shares of the same fund in an amount up to, but not exceeding, the dollar amount
of Class A or Class B shares which you previously redeemed. To exercise this
privilege, you must send a letter to our service provider, State Street Bank and
Trust, along with a check for the repurchased shares.

INVOLUNTARY REDEMPTION

If your account balance falls below $500 in any Fund as a result of a redemption
or exchange, or if your account has not met the $1,000 minimum investment
requirement, we may sell your remaining shares in the Fund at net asset value.
We first will notify you by mail, giving you at

PROSPECTUS o DAVIS GLOBAL FUND o 40

least sixty days' notice that an INVOLUNTARY REDEMPTION may take place. If you
increase your account balance to above $500 during the notice period, the
Involuntary Redemption will be canceled.

MAKING AUTOMATIC WITHDRAWALS

If your fund/account balance is more than $10,000, you can sell a set dollar or
percentage amount each month or quarter (for retirement accounts or IRAs,
withdrawals may be established on an annual basis). Because withdrawals are
sales, they may produce a gain or loss. If you purchase additional shares at the
same time that you make a withdrawal, you may have to pay taxes and a sales
load. When you participate in this plan, known as the AUTOMATIC WITHDRAWAL PLAN,
shares are sold so that you will receive payment by one of three methods:

o You may receive funds at the address of record provided that this address
has been unchanged for a period of not less than thirty days. These funds
are sent by check between the 5th and 28th days of the month.

o You may also choose to receive funds by Automated Clearing House (ACH) to
the banking institution of your choice. You may elect an ACH draft date
between the 5th and the 28th days of the month. You must complete the
appropriate section of the Application Form. If you wish to execute an
Automatic Withdrawal Plan by ACH after your account has been established,
you must submit a letter of instruction with a medallion signature
guarantee.

o You may have funds sent by check to a third party at an address other than
the address of record. You must complete the appropriate section of the
Application Form. If you wish to designate a third-party payee after your
account has been established, you must submit a letter of instruction with
a medallion signature guarantee.

You may stop automatic withdrawals at any time without charge or penalty by
calling the Distributor or by notifying the service agent in writing.

WIRING SALE PROCEEDS TO YOUR BANK ACCOUNT

You may be eligible to have your redemption proceeds electronically transferred
to a commercial bank account by federal funds wire. There is a $5 charge by
State Street Bank and Trust for wire service (State Street

PROSPECTUS o DAVIS GLOBAL FUND o 41

Bank and Trust charges $50 for wiring money internationally), and receiving
banks may also charge for this service. Redemption by federal funds wire is
usually credited to your bank account on the next business day after the sale.
Alternatively, redemption through Automated Clearing House will usually arrive
at your bank two banking days after the sale. To have redemption proceeds sent
by federal funds wire to your bank, you must first fill out the Banking
Instructions section on the account application form and attach a voided check
or deposit slip. If the account has already been established, an Account Service
Form or letter of instruction must be submitted with a medallion guarantee and a
copy of a voided check or deposit slip.

EXCHANGING SHARES

You can sell shares of any Davis Fund to buy shares in the same class of any
other Davis Fund without having to pay a sales charge. This is known as an
exchange. You can only exchange shares from your account within the same class
and under the same registration. You can exchange shares by telephone, by
internet, by mail or through a dealer. The initial exchange must be for at least
$1,000 unless you are participating in the Automatic Exchange Program. Exchanges
are normally performed on the same day of the request if received in proper form
(all necessary documents, signatures, etc.) by 4 p.m. Eastern Time.

Shares in different Davis Funds may be exchanged at relative net asset value.
However, if any Davis Fund shares being exchanged are subject to a deferred
sales charge, Statement of Intention or other limitation, the limitation will
continue to apply to the shares received in the exchange.

When you exchange shares in a Davis Fund for shares in Davis Government Money
Market Fund, the holding period for any deferred sales charge does not continue
during the time that you own Davis Government Money Market Fund shares. For
example, Class B shares are subject to a declining sales charge for six years.
Any period that you are invested in shares of Davis Government Money Market Fund
will be added to the six-year declining sales charge period.

When you exchange shares by mail, you must send our service provider, State
Street Bank and Trust, a written request for the exchange. In the past, the
Davis Funds issued certificates. If you wish to exchange shares for which you
hold share certificates, these certificates must be sent by

PROSPECTUS o DAVIS GLOBAL FUND o 42

certified mail to State Street Bank and Trust accompanied by a letter of
instruction signed by the owner(s). If your shares are being sold for cash, this
is known as a redemption. Please see the section, "What You Need to Know Before
You Sell Your Shares," for restrictions that might apply to this type of
transaction.

When you exchange shares through a dealer, you may be charged a service fee or
commission for each transaction.

Before you decide to make an exchange, you must obtain the current prospectus of
the desired Davis Fund. For federal income tax purposes, exchanges between Davis
Funds are treated as a sale and a purchase. Therefore, there will usually be a
recognizable capital gain or loss due to an exchange.

MARKET TIMING

Davis Funds discourage short-term or excessive trading, often referred to as
"market timing," and intend to seek to restrict or reject such trading or take
other action if in the judgment of the Adviser such trading may be detrimental
to the interests of a Fund and its long-term shareholders. Market timing
strategies may dilute the value of fund shares held by long-term shareholders,
interfere with the efficient management of the Fund's portfolio, and increase
brokerage and administrative costs.

The Board of Directors has adopted policies and procedures with respect to the
frequent purchases and redemption of fund shares. Currently, four round-trip
exchanges between Davis Funds are allowed during a calendar year. You may make
an unlimited number of exchanges out of Davis Government Money Market Fund.
Automatic exchanges are excluded from this provision. The Distributor must
approve in writing any exchanges above the limit.

Davis Funds use several methods to reduce the risk of market timing. These
methods include: (i) limiting annual exchange activity per fund account; (ii)
committing staff to selectively review on a continuing basis recent trading
activity in order to identify trading activity that may be contrary to the
Funds' market timing policy; and (iii) accessing a redemption fee for short-term
trading.

PROSPECTUS o DAVIS GLOBAL FUND o 43

If Davis Funds determine that your purchase or exchange patterns reflect a
market timing strategy, Davis Funds reserve the right to take any action
permitted under applicable rules and standards, including but not limited to:
(i) refusing to accept your orders to purchase Fund shares, and/or (ii)
restricting the availability of exchanges through telephone requests, facsimile
transmissions, automated telephone services, internet services or any electronic
transfer services.

While Davis Funds encourages financial intermediaries to apply the Funds'
marketing timing policy to their customers who invest indirectly in the Funds,
Davis Funds are limited in their ability to monitor the trading activity or
enforce the Funds' market timing policy with respect to customers of financial
intermediaries.

You can make exchanges among any of the Davis Funds without paying
additional sales charges

EQUITY FUNDS

o Davis New York Venture Fund
o Davis Opportunity Fund
o Davis Financial Fund
o Davis Research Fund
o Davis Global Fund

GROWTH & Income Funds

o Davis Real Estate Fund
o Davis Appreciation & Income Fund

GOVERNMENT BOND FUND

o Davis Government Bond Fund

GOVERNMENT MONEY MARKET FUND

o Davis Government Money Market Fund

For more information about any of the other Davis Funds, including risks,
charges and expenses, ask for a prospectus. Read it carefully before
investing or sending money.

MAKING AUTOMATIC EXCHANGES

You can elect to make automatic monthly exchanges if all accounts involved are
registered under the same name and have a minimum initial value of $1,000. You
must exchange at least $25 to participate in this program, known as the
AUTOMATIC EXCHANGE PROGRAM. To sign up for this

PROSPECTUS o DAVIS GLOBAL FUND o 44

program, fill out the appropriate section of the Application Form. If your
account has already been established, you may contact our customer service
department to set up this program.

TELEPHONE TRANSACTIONS

A benefit of investing through Davis Funds is that you can use our automated
telephone system to buy, sell or exchange shares. If you do not wish to have
this option activated for your account, complete the appropriate section of the
Application Form.

When you call the Distributor, you can perform a transaction with Davis Funds in
one of two ways:
o Speak directly with a representative during business hours (9 a.m. to 6
p.m. Eastern Time).
o If you have a TouchTone(TM) telephone, you can use Davis Funds' automated
telephone system, known as DAVIS DIRECT ACCESS, 24 hours a day, seven days
a week.

If you wish to sell shares by telephone and receive a check in the mail: o The
maximum amount that can be issued is $100,000.
o The check can be issued only to the registered account owner.
o The check must be sent to the address on file with the Distributor.
o Your current address must be on file for at least thirty days.

When you buy, sell or exchange shares over the telephone, you agree that the
Davis Funds are not liable for following telephone instructions believed to be
genuine (that is, directed by the account holder or registered representative on
file). We use certain procedures to confirm that your instructions are genuine,
including a request for personal identification and a tape recording of the
conversation. If these procedures are not used, the Fund may be liable for any
loss from unauthorized instructions.

Be aware that during unusual market conditions, Davis Funds may not be able to
accept all requests by telephone.

PROSPECTUS o DAVIS GLOBAL FUND o 45

INTERNET TRANSACTIONS

You can use our website--WWW.DAVISFUNDS.COM--to review your account balance and
recent transactions. Your account may qualify for the privilege to purchase,
sell or exchange shares online. You may also request confirmation statements and
tax summary information to be mailed to the address on file. Please review our
website for more complete information. If you do not wish to have this option
activated for your account, please contact our customer service department.

To access your accounts, you will need the name of the Fund(s) in which you are
invested, your account number and your Social Security Number. Davis Funds
provides written confirmation of your initial access and any time you buy, sell
or exchange shares. You must also establish a unique and confidential Personal
Identification Number (PIN). This PIN is required each time you access your
Davis account online.

When you buy, sell or exchange shares over the Internet, you agree that the
Davis Funds are not liable for following instructions believed to be genuine
(that is, directed by the account holder or registered representative on file).
We use certain procedures to confirm that your instructions are genuine. If
these procedures are not used, the Funds may be liable for any loss from
unauthorized instructions.

YOU CAN USE DAVIS DIRECT ACCESS TO:

o Get the price, total return and fund description for any Davis Fund.
o Check your account balance and other account information.
o Buy, sell and exchange shares.*
o Get the mailing address and wire instructions for any Davis Fund.

* Retirement Accounts may be subject to restrictions.

PROSPECTUS o DAVIS GLOBAL FUND o 46

OTHER
INFORMATION
--------------------------------------------------------------------------------

DIVIDENDS AND DISTRIBUTIONS

o The Davis Equity Funds (i.e. Davis Research Fund, Davis Global Fund, Davis
New York Venture Fund, Davis Opportunity Fund, and Davis Financial Fund)
ordinarily distribute their dividends and capital gains, if any, in
December.

o The Davis Growth & Income Funds (i.e. Davis Real Estate Fund and Davis
Appreciation & Income Fund) ordinarily distribute dividends and quarterly
and capital gains, if any, in December.

o Davis Government Bond Fund and Davis Government Money Market Fund
ordinarily distribute dividends monthly. Davis Government Bond Fund
ordinarily distributes capital gains, if any, in December. Davis Government
Money Market Fund does not ordinarily distribute capital gains.

o When a dividend or capital gain is distributed, the net asset value per
share is reduced by the amount of the payment. Davis Government Bond Fund's
and Davis Government Money Market Fund's net asset values are not affected
by dividend payments.

You may elect to reinvest dividend and/or capital gain distributions to purchase
additional shares of any Davis Fund, or you may elect to receive them in cash.
Many shareholders do not elect to take capital gain distributions in cash
because these distributions reduce principal value.

FINANCIAL HIGHLIGHTS

As of the date of this prospectus the Fund does not have an operating history
and therefore does not have any financial highlights. Financial highlights will
be available when the Fund produces annual and semi-annual reports.

PROSPECTUS o DAVIS GLOBAL FUND o 47

HOUSEHOLDING

To avoid sending duplicate copies of materials to households, the Fund will mail
only one copy of each prospectus, annual and semi-annual report to shareholders
having the same last name and address on the Fund's records. The consolidation
of these mailings, called householding, benefits the Fund through reduced
mailing expense. If you do not want the mailing of these documents to be
combined with those to other members of your household, please contact the Davis
Funds in writing at 2949 E. Elvira Road, Suite 101, Tucson, Arizona 85706.
Individual copies of prospectuses and reports will be sent to you within thirty
days after the Fund receives your request to stop householding.

PRIVACY NOTICE

While you generally will be dealing with a broker-dealer or other financial
adviser, we may collect information about you from your account application and
other forms that you may deliver to us. We use this information to process your
requests and transactions; for example, to provide you with additional
information about our funds, to open an account for you, or to process a
transaction. In order to service your account and effect your transactions, we
may provide your personal information to firms that assist us in servicing your
account, such as our transfer agent. We may also provide your name and address
to one of our agents for the purpose of mailing to you your account statement
and other information about our products and services. We require these outside
firms and agents to protect the confidentiality of your information and to use
the information only for the purpose for which the disclosure is made. We do not
provide customer names and addresses to outside firms, organizations or
individuals except in furtherance of our business relationship with you or as
otherwise allowed by law.

We restrict access to nonpublic personal information about you to those
employees who need to know that information to provide products or services to
you. We maintain physical, electronic and procedural safeguards that comply with
federal standards to guard your personal information.

PROSPECTUS o DAVIS GLOBAL FUND o 48

OBTAINING ADDITIONAL INFORMATION
--------------------------------------------------------------------------------

The Fund began operations on December 22, 2004. SEMI-ANNUAL and ANNUAL REPORTS
are expected to be available July 1, 2005 and January 1, 2006, respectively.

Additional information about the Fund's investments is available in the Fund's
Annual and Semi-Annual Reports to shareholders. In the Fund's annual report, you
will find a discussion of the market conditions and investment strategies that
significantly affected the Fund's performance during its last fiscal year. THE
STATEMENT OF ADDITIONAL INFORMATION provides more detailed information about
Davis Funds and their management and operations. The Statement of Additional
Information and the Fund's Annual and Semi-Annual Reports are available, without
charge, upon request.

The Davis Funds' Statement of Additional Information and Annual Report have been
filed with the Securities and Exchange Commission, are incorporated by
reference, and are legally a part of this prospectus.

HOW TO GET MORE INFORMATION

(Including Annual Report, Semi-Annual Report and Statement of Additional
Information)

o BY TELEPHONE. Call Davis Funds toll-free at 1-800-279-0279, Monday through
Friday, 9 a.m. to 6 p.m. Eastern Time. You may also call this number for
account inquiries.

o BY MAIL. Write to State Street Bank and Trust Company, c/o Davis Funds,
P.O. Box 8406, Boston, MA 02266-8406.

o ON THE INTERNET. WWW.DAVISFUNDS.COM.

o FROM THE SEC. Additional copies of the registration statement can be
obtained, for a duplicating fee, by writing the Public Reference Section of
the SEC, Washington, DC 20549-0102, or by sending an electronic request to
publicinfo@sec.gov. Reports and other information about the Funds are also
available by visiting the SEC website (www.sec.gov). For more information
on the operations of the Public Reference Room, call 1-202-942-8090.

Investment Company Act File No. 811-1701

STATEMENT OF ADDITIONAL INFORMATION
DECEMBER 22, 2004

FOR

DAVIS GLOBAL FUND

PART OF
DAVIS NEW YORK VENTURE FUND, INC.
2949 EAST ELVIRA ROAD, SUITE 101
TUCSON, ARIZONA 85706
1-800-279-0279

THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND SHOULD BE READ
IN CONJUNCTION WITH THE CLASS A, CLASS B AND CLASS C PROSPECTUS DATED DECEMBER
22, 2004. THIS STATEMENT OF ADDITIONAL INFORMATION INCORPORATES THE PROSPECTUS
BY REFERENCE. THE PROSPECTUS MAY BE OBTAINED FROM THE FUND.

THE FUND'S MOST RECENT ANNUAL REPORT AND SEMI-ANNUAL REPORT TO SHAREHOLDERS ARE
SEPARATE DOCUMENTS THAT ARE AVAILABLE ON REQUEST AND WITHOUT CHARGE BY CALLING
SHAREHOLDER SERVICES. AS A NEW FUND, THE FIRST SEMI-ANNUAL REPORT IS EXPECTED TO
BE AVAILABLE ON OR ABOUT JULY 1, 2005, THE FIRST ANNUAL REPORT IS EXPECTED TO BE
AVAILABLE ON OR ABOUT DECEMBER 1, 2005. THE ANNUAL REPORT, ACCOMPANYING NOTES
AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM APPEARING IN THE
ANNUAL REPORT ARE INCORPORATED BY REFERENCE IN THIS STATEMENT OF ADDITIONAL
INFORMATION.

TABLE OF CONTENTS

PAGE

SECTION I: INVESTMENT STRATEGIES, RISKS AND RESTRICTIONS.......................3
--------------------------------------------------------

Additional Information About the Fund's Investment Strategies
and Risks..............................................................3
Portfolio Transactions...................................................22
Investment Restrictions..................................................26

SECTION II: KEY PERSONS.......................................................29
-----------------------

Organization of the Fund.................................................29
Directors and Officers...................................................29
Directors................................................................30
Independent Directors' Compensation......................................34
Officers.................................................................34
Standing Committees of the Board of Directors............................35
Directors' Fund Holdings.................................................36
Independent Directors' Affiliations and Transactions.....................36
Certain Shareholders of the Fund.........................................37
Investment Advisory Services.............................................39
Portfolio Managers.......................................................39
Disclosure of Portfolio Holdings.........................................41
Distribution of Fund Shares..............................................41
Other Important Service Providers........................................44

SECTION III: CLASSES OF SHARES, PURCHASES, EXCHANGES AND REDEMPTIONS..........45
--------------------------------------------------------------------

Selecting the Appropriate Class of Shares................................45
How to Purchase Shares...................................................51
Special Services.........................................................51
Exchange of Shares.......................................................53
Redemption of Shares.....................................................54

SECTION IV: GENERAL INFORMATION...............................................57
-------------------------------

Determining the Price of Shares..........................................57
Dividends and Distributions..............................................57
Federal Income Taxes.....................................................58
Performance Data.........................................................59

APPENDIX A: QUALITY RATINGS OF DEBT SECURITIES................................64

APPENDIX B: TERMS AND CONDITIONS FOR A STATEMENT OF INTENTION.................66

APPENDIX C: SUMMARY OF PROXY VOTING PROCEDURES AND POLICIES ..................66

SECTION I: INVESTMENT STRATEGIES, RISKS AND RESTRICTIONS

This Statement of Additional Information should be read in conjunction with the
prospectus. This Statement of Additional Information supplements the information
available in the prospectus.

ADDITIONAL INFORMATION ABOUT THE FUND'S
INVESTMENT STRATEGIES AND RISKS

THE ADVISER. Davis Global Fund ("Fund") is managed by Davis Selected Advisers,
L.P. ("Adviser").

PRINCIPAL INVESTMENT STRATEGIES AND ADDITIONAL INVESTMENT STRATEGIES. The
investment objective, principal investment strategies and the main risks of the
Fund are described in the Fund's prospectus. The Fund is not limited to just
investing in the securities and using the principal investment strategies
described in the prospectus. The Fund may invest in other securities and use
additional investment strategies if, in the Adviser's professional judgment, the
securities or investment strategies are appropriate. Factors which the Adviser
considers include whether (i) purchasing such securities would be consistent
with shareholders' reasonable expectations; (ii) they may assist the Fund in
pursuing its investment objective; (iii) they are consistent with the Fund's
investment strategy; (iv) they will cause the Fund to violate any of its
investment restrictions; or (v) they will materially change the Fund's risk
profile as described in the Fund's prospectuses and Statement of Additional
Information, as amended from time to time. This section of the Statement of
Additional Information contains supplemental information about the Fund's
principal investment strategies and also describes additional investment
strategies that the Adviser and/or Davis Selected Advisers - NY, Inc.
("Sub-Adviser") may use to try to achieve the Fund's objective. The composition
of the Fund's portfolio and the strategies that the Adviser may use to try to
achieve the Fund's investment objective may vary depending on market conditions
and available investment opportunities. The Fund is not required to use any of
the investment strategies described below in pursuing its investment objective.
The Fund may use some of the investment strategies rarely or not at all. Whether
the Fund uses a given investment strategy at a given time depends on the
professional judgment of the Adviser.

There is no assurance that the Fund will achieve its investment objective. An
investment in the Fund may not be appropriate for all investors, and short-term
investing is discouraged. The Fund's investment objective is not a fundamental
policy and may be changed by the Board of Directors without a vote of
shareholders. The Fund's prospectus would be amended prior to any change in
investment objective, and shareholders would be promptly notified of the change.

EQUITY SECURITIES. Equity securities represent an ownership position in a
company. These securities may include, without limitation, common stocks,
preferred stocks and securities with equity conversion or purchase rights. The
prices of equity securities fluctuate based on changes in the financial
condition of their issuers and on market and economic conditions. Events that
have a negative impact on a business probably will be reflected in a decline in
their equity securities. Furthermore, when the stock market declines, most
equity securities, even those issued by strong companies, likely will decline in
value.

RIGHTS AND WARRANTS. Rights and warrants are forms of equity securities.
Warrants basically are options to purchase equity securities at specific prices
valid for a specific period of time. Their prices do not necessarily move
parallel to the prices of the underlying securities. Rights are similar to
warrants, but normally have a shorter maturity and are distributed directly by
the issuer to its shareholders. Rights and warrants have no voting rights,
receive no dividends and have no rights with respect to the assets of the
issuer.

INITIAL PUBLIC OFFERINGS ("IPOS"). IPOs are a form of equity security. IPOs can
have a dramatic impact on Fund performance and assumptions about future
performance based on that impact may not be warranted. Investing in IPOs
involves risks. Many, but not all, of the companies issuing IPOs are small,
unseasoned companies. These are companies that have been in operation for a
short period of time. Small company securities, including IPOs, are subject to
greater volatility in their prices than are securities issued by more
established companies. If the Fund does not intend to make a long-term
investment in the IPO (it is

sometimes possible to immediately sell an IPO at a profit) the Adviser may not
perform the same detailed research on the company that it does for core
holdings.

SMALL- AND MID-CAPITALIZATION COMPANIES. For Davis Global Fund, companies with
less than $5 billion in market capitalization are considered by the Adviser to
be mid-capitalization and companies with less than $1 billion in market
capitalization are considered by the Adviser to be small-capitalization
companies. Investing in mid- and small-capitalization companies may be more
risky than investing in large-capitalization companies. Smaller companies
typically have more limited product lines, markets and financial resources than
larger companies, and their securities may trade less frequently and in more
limited volume than those of larger, more mature companies. Securities of these
companies may be subject to volatility in their prices. They may have a limited
trading market, which may adversely affect the Fund's ability to dispose of them
and can reduce the price the Fund might be able to obtain for them. Other
investors that own a security issued by a mid- or small-capitalization company
for whom there is limited liquidity might trade the security when the Fund is
attempting to dispose of its holdings in that security. In that case the Fund
might receive a lower price for its holdings than otherwise might be obtained.
Small-capitalization companies also may be unseasoned. These include companies
that have been in operation for less than three years, including the operations
of any predecessors.

FINANCIAL SERVICES SECTOR. The Adviser has developed a special expertise in
financial services companies and the Fund may, from time to time, invest a
significant portion of its assets in the financial services sector if the
Adviser believes that such investments are consistent with the Fund's investment
strategy, may contribute to the Fund achieving its investment objective and will
not cause the Fund to violate any of its investment restrictions.

A company is "principally engaged" in financial services if it owns financial
services related assets constituting at least 50% of the total value of its
assets, or if at least 50% of its revenues are derived from its provision of
financial services. The financial services sector consists of several different
industries that behave differently in different economic and market
environments; for example, banking, insurance and securities brokerage houses.
Companies in the financial services sector include commercial banks, industrial
banks, savings institutions, finance companies, diversified financial services
companies, investment banking firms, securities brokerage houses, investment
advisory companies, leasing companies, insurance companies and companies
providing similar services.

Due to the wide variety of companies in the financial services sector, they may
react in different ways to changes in economic and market conditions.

Banking. Commercial banks (including "money center" regional and community
banks), savings and loan associations and holding companies of the foregoing are
especially subject to adverse effects of volatile interest rates, concentrations
of loans in particular industries (such as real estate or energy) and
significant competition. The profitability of these businesses is to a
significant degree dependent on the availability and cost of capital funds.
Economic conditions in the real estate market may have a particularly strong
effect on certain banks and savings associations. Commercial banks and savings
associations are subject to extensive federal and, in many instances, state
regulation. Neither such extensive regulation nor the federal insurance of
deposits ensures the solvency or profitability of companies in this industry,
and there is no assurance against losses in securities issued by such companies.

Insurance. Insurance companies are particularly subject to government regulation
and rate setting, potential anti-trust and tax law changes, and industry-wide
pricing and competition cycles. Property and casualty insurance companies also
may be affected by weather, terrorism and other catastrophes. Life and health
insurance companies may be affected by mortality and morbidity rates, including
the effects of epidemics. Individual insurance companies may be exposed to
reserve inadequacies, problems in investment portfolios (for example, due to
real estate or "junk" bond holdings) and failures of reinsurance carriers.

Other Financial Services Companies. Many of the investment considerations
discussed in connection with banks and insurance companies also apply to
financial services companies. These companies are all subject to extensive
regulation, rapid business changes, and volatile performance dependent on the
availability and

cost of capital and prevailing interest rates and significant competition.
General economic conditions significantly affect these companies. Credit and
other losses resulting from the financial difficulty of borrowers or other third
parties have a potentially adverse effect on companies in this industry.
Investment banking, securities brokerage and investment advisory companies are
particularly subject to government regulation and the risks inherent in
securities trading and underwriting activities.

Other Considerations. Regulations of the Securities and Exchange Commission
("SEC") impose limits on: (1) investments in the securities of companies that
derive more than 15% of their gross revenues from the securities or investment
management business. Although there are exceptions, a Fund is prohibited from
investing more than 5% of its total assets in a single company that derives more
than 15% of its gross revenues from the securities or investment management
business, and (2) investments in insurance companies. A Fund generally is
prohibited from owning more than 10% of the outstanding voting securities of an
insurance company.

REAL ESTATE SECURITIES, INCLUDING REITS. Real estate securities are a form of
equity security. Real estate securities are issued by companies that have at
least 50% of the value of their assets, gross income or net profits attributable
to ownership, financing, construction, management or sale of real estate, or to
products or services that are related to real estate or the real estate
industry. The Fund does not invest directly in real estate. Real estate
companies include real estate investment trusts ("REITs") or other securitized
real estate investments, brokers, developers, lenders and companies with
substantial real estate holdings such as paper, lumber, hotel and entertainment
companies. REITs pool investors' funds for investment primarily in
income-producing real estate or real estate-related loans or interests. A REIT
is not taxed on income distributed to shareholders if it complies with various
requirements relating to its organization, ownership, assets and income, and
with the requirement that it distribute to its shareholders at least 95% of its
taxable income (other than net capital gains) each taxable year. REITs generally
can be classified as Equity REITs, Mortgage REITs and Hybrid REITs. Equity REITs
invest the majority of their assets directly in real property and derive their
income primarily from rents. Equity REITs also can realize capital gains by
selling property that has appreciated in value. Mortgage REITs invest the
majority of their assets in real estate mortgages and derive their income
primarily from interest payments. Hybrid REITs combine the characteristics of
both Equity REITs and Mortgage REITs. To the extent that the management fees
paid to a REIT are for the same or similar services as the management fees paid
to the Fund, there will be a layering of fees, which would increase expenses and
decrease returns.

Real estate securities, including REITs, are subject to risks associated with
the direct ownership of real estate. The Fund also could be subject to such
risks by reason of direct ownership as a result of a default on a debt security
it may own. These risks include declines in the value of real estate, risks
related to general and local economic conditions, overbuilding and increased
competition, increases in property taxes and operating expenses, changes in
zoning laws, uninsured casualties or condemnation losses, fluctuations in rental
income, changes in neighborhood values, the appeal of properties to tenants and
increases in interest rates.

Equity REITs may be affected by changes in the value of the underlying property
owned by the trusts, while mortgage REITs may be affected by the quality of
credit extended. Equity and mortgage REITs are dependent on management skill,
may not be diversified and are subject to project financing risks. Such trusts
also are subject to heavy cash flow dependency, defaults by borrowers,
self-liquidation and the possibility of failing to qualify for tax-free
pass-through of income under the Internal Revenue Code, and failing to maintain
exemption from registration under the Investment Company Act of 1940 ("1940
Act"). Changes in interest rates also may affect the value of the debt
securities in the Fund's portfolio. By investing in REITs indirectly through the
Fund, a shareholder will bear not only his or her proportionate share of the
expense of the Fund but also, indirectly, similar expenses of the REITs,
including compensation of management. Some real estate securities may be rated
less than investment grade by rating services. Such securities may be subject to
the risks of high-yield, high-risk securities discussed below.

CONVERTIBLE SECURITIES. Convertible Securities are a form of equity security.
Generally, convertible securities are bonds, debentures, notes, preferred
stocks, warrants or other securities that convert or are exchangeable into
shares of the underlying common stock at a stated exchange ratio. Usually, the
conversion or exchange is solely at the option of the holder. However, some
convertible securities may be convertible or exchangeable at

the option of the issuer or are automatically converted or exchanged at a
certain time, or on the occurrence of certain events, or have a combination of
these characteristics. Usually a convertible security provides a long-term call
on the issuer's common stock and therefore tends to appreciate in value as the
underlying common stock appreciates in value. A convertible security also may be
subject to redemption by the issuer after a certain date and under certain
circumstances (including a specified price) established on issue. If a
convertible security held by the Fund is called for redemption, the Fund could
be required to tender it for redemption, convert it into the underlying common
stock or sell it.

Convertible bonds, debentures and notes are varieties of debt securities, and as
such are subject to many of the same risks, including interest rate sensitivity,
changes in debt rating and credit risk. In addition, convertible securities are
often viewed by the issuer as future common stock subordinated to other debt and
carry a lower rating than the issuer's non-convertible debt obligations. Thus,
convertible securities are subject to many of the same risks as high-yield,
high-risk securities. A more complete discussion of these risks is provided
below in the sections titled "Bonds and Other Debt Securities" and "High-Yield,
High-Risk Debt Securities."

Due to its conversion feature, the price of a convertible security normally will
vary in some proportion to changes in the price of the underlying common stock.
A convertible security will also normally provide a higher yield than the
underlying common stock (but generally lower than comparable non-convertible
securities). Due to their higher yield, convertible securities generally sell
above their "conversion value," which is the current market value of the stock
to be received on conversion. The difference between this conversion value and
the price of convertible securities will vary over time depending on the value
of the underlying common stocks and interest rates. When the underlying common
stocks decline in value, convertible securities will tend not to decline to the
same extent because the yield acts as a price support. When the underlying
common stocks rise in value, the value of convertible securities also may be
expected to increase, but generally will not increase to the same extent as the
underlying common stocks.

Fixed-income securities generally are considered to be interest rate-sensitive.
The market value of convertible securities will change in response to changes in
interest rates. During periods of falling interest rates, the value of
convertible bonds generally rises. Conversely, during periods of rising interest
rates, the value of such securities generally declines. Changes by recognized
rating services in their ratings of debt securities and changes in the ability
of an issuer to make payments of interest and principal also will affect the
value of these investments.

FOREIGN SECURITIES. Equity securities are issued by both domestic and foreign
companies. Sometimes a company may be classified as either "domestic" or
"foreign" depending upon which factors are considered most important for a given
company. Factors which the Adviser considers include: (1) was the company
organized under the laws of the United States or a foreign country; (2) are the
company's securities principally traded in securities markets outside of the
United States; (3) where does the company earn the majority of its revenues or
profits; and (4) where does the company have the majority of its assets.

Foreign securities include, but are not limited to, equity securities, real
estate securities, convertible securities and bonds. Investments in foreign
securities may be made through the purchase of individual securities on
recognized exchanges and developed over-the-counter markets, through American
Depository Receipts ("ADRs") or Global Depository Receipts ("GDRs") covering
such securities, and through U.S.-registered investment companies investing
primarily in foreign securities. To the extent that the management fees paid to
an investment company are for the same or similar services as the management
fees paid to the Fund, there would be a layering of fees that would increase
expenses and decrease returns. When the Fund invests in foreign securities,
their operating expenses are likely to be higher than that of an investment
company investing exclusively in U.S. securities, since the custodial and
certain other expenses are expected to be higher.

Investments in foreign securities may involve a higher degree of risk than
investments in domestic issuers. Foreign securities are often denominated in
foreign currencies, which means that their value will be affected by changes in
exchange rates, as well as other factors that affect securities prices. There
generally is less information publicly available about foreign securities and
securities markets, and there may be less government regulation and supervision
of foreign issuers and securities markets. Foreign securities and

markets also may be affected by political and economic instabilities and may be
more volatile and less liquid than domestic securities and markets. Investment
risks may include expropriation or nationalization of assets, confiscatory
taxation, exchange controls and limitations on the use or transfer of assets and
significant withholding taxes. Foreign economies may differ from the United
States favorably or unfavorably with respect to inflation rates, balance of
payments, capital reinvestment, gross national product expansion and other
relevant indicators. The Fund may attempt to reduce exposure to market and
currency fluctuations by trading in currency futures contracts or options on
futures contracts for hedging purposes only.

SPECIAL RISKS OF EMERGING MARKETS. Emerging and developing markets abroad may
offer special opportunities for growth investing but have greater risks than
more developed foreign markets, such as those in Europe, Canada, Australia, New
Zealand and Japan. Securities in emerging market countries may be more difficult
to sell at an acceptable price and their prices may be more volatile than
securities of companies in more developed markets. There may be even less
liquidity in their securities markets, and settlements of trades may be subject
to greater delays so that the Fund may not receive the proceeds of a sale of a
security on a timely basis. They are subject to greater risks of limitations on
the repatriation of income and profits because of currency restrictions imposed
by local governments. Those countries also may be subject to the risk of greater
political and economic instability, which can greatly affect the volatility of
prices of securities in those countries. Emerging countries may have less
developed trading markets and exchanges. They may have less developed legal and
accounting systems.

BONDS AND OTHER DEBT SECURITIES. Bonds and other debt securities may be
purchased by the Fund if the Adviser believes that they are consistent with the
Fund's investment strategies, may contribute to the Fund's investment objective
and will not cause the Fund to violate any of its investment restrictions. The
U.S. government, corporations and other issuers sell bonds and other debt
securities to borrow money. Issuers pay investors interest and generally must
repay the amount borrowed at maturity. Some debt securities, such as zero-coupon
bonds, do not pay current interest, but are purchased at a discount from their
face values. The prices of debt securities fluctuate, depending on such factors
as interest rates, credit quality and maturity.

Bonds and other debt securities generally are subject to credit risk and
interest rate risk. While debt securities issued by the U.S. Treasury generally
are considered free of credit risk, debt issued by agencies and corporations all
entail some level of credit risk. Investment grade debt securities have less
credit risk than do high-yield, high-risk debt securities. Credit risk is
described more fully in the section titled "High-Yield, High-Risk Debt
Securities."

Bonds and other debt securities generally are interest rate-sensitive. During
periods of falling interest rates, the value of debt securities held by the Fund
generally rises. Conversely, during periods of rising interest rates, the value
of such securities generally declines. Changes by recognized rating services in
their ratings of debt securities and changes in the ability of an issuer to make
payments of interest and principal also will affect the value of these
investments.

GOVERNMENT SECURITIES. U.S. Government Securities are debt securities that are
obligations of or guaranteed by the U.S. government, its agencies or
instrumentalities. There are two basic types of U.S. Government Securities: (1)
direct obligations of the U.S. Treasury, and (2) obligations issued or
guaranteed by an agency or instrumentality of the U.S. government. Agencies and
instrumentalities include the Federal Farm Credit System ("FFCS"), Student Loan
Marketing Association ("SLMA"), Federal Home Loan Mortgage Corporation
("FHLMC"), Federal Home Loan Banks ("FHLB"), Federal National Mortgage
Association ("FNMA") and Government National Mortgage Association ("GNMA"). Some
obligations issued or guaranteed by agencies or instrumentalities, such as those
issued by GNMA, are fully guaranteed by the U.S. government. Others, such as
FNMA bonds, rely on the assets and credit of the instrumentality with limited
rights to borrow from the U.S. Treasury. Still other securities, such as
obligations of the FHLB, are supported by more extensive rights to borrow from
the U.S. Treasury.

U.S. Government Securities include mortgage-related securities issued by an
agency or instrumentality of the U.S. government. GNMA Certificates are
mortgage-backed securities representing part ownership of a

pool of mortgage loans. These loans issued by lenders such as mortgage bankers,
commercial banks and savings and loan associations are either insured by the
Federal Housing Administration or guaranteed by the Veterans Administration. A
"pool" or group of such mortgages is assembled and, after being approved by
GNMA, is offered to investors through securities dealers. Once approved by GNMA,
the timely payment of interest and principal on each mortgage is guaranteed by
GNMA and backed by the full faith and credit of the U.S. government. GNMA
Certificates differ from bonds in that principal is paid back monthly by the
borrower over the term of the loan rather than returned in a lump sum at
maturity. GNMA Certificates are called "pass-through" securities because both
interest and principal payments (including prepayments) are passed through to
the holder of the Certificate.

Pools of mortgages also are issued or guaranteed by other agencies of the U.S.
government. The average life of pass-through pools varies with the maturities of
the underlying mortgage instruments. In addition, a pool's term may be shortened
or lengthened by unscheduled or early payment, or by slower than expected
prepayment of principal and interest on the underlying mortgages. The occurrence
of mortgage prepayments is affected by the level of interest rates, general
economic conditions, the location and age of the mortgage and other social and
demographic conditions. As prepayment rates of individual pools vary widely, it
is not possible to accurately predict the average life of a particular pool.

A collateralized mortgage obligation ("CMO") is a debt security issued by a
corporation, trust or custodian, or by a U.S. government agency or
instrumentality that is collateralized by a portfolio or pool of mortgages,
mortgage-backed securities, U.S. Government Securities or corporate debt
obligations. The issuer's obligation to make interest and principal payments is
secured by the underlying pool or portfolio of securities. CMOs are most often
issued in two or more classes (each of which is a separate security) with
varying maturities and stated rates of interest. Interest and principal payments
from the underlying collateral (generally a pool of mortgages) are not
necessarily passed directly through to the holders of the CMOs; these payments
typically are used to pay interest on all CMO classes and to retire successive
class maturities in a sequence. Thus, the issuance of CMO classes with varying
maturities and interest rates may result in greater predictability of maturity
with one class and less predictability of maturity with another class than a
direct investment in a mortgage-backed pass-through security (such as a GNMA
Certificate). Classes with shorter maturities typically have lower volatility
and yield while those with longer maturities typically have higher volatility
and yield. Thus, investments in CMOs provide greater or lesser control over the
investment characteristics than mortgage pass-through securities and offer more
defensive or aggressive investment alternatives.

Investments in mortgage-related U.S. Government Securities, such as GNMA
Certificates and CMOs, also involve other risks. The yield on a pass-through
security typically is quoted based on the maturity of the underlying instruments
and the associated average life assumption. Actual prepayment experience may
cause the yield to differ from the assumed average life yield. Accelerated
prepayments adversely impact yields for pass-throughs purchased at a premium;
the opposite is true for pass-throughs purchased at a discount. During periods
of declining interest rates, prepayment of mortgages underlying pass-through
certificates can be expected to accelerate. When the mortgage obligations are
prepaid, the Fund reinvests the prepaid amounts in securities, the yields of
which reflect interest rates prevailing at that time. Therefore, the Fund's
ability to maintain a portfolio of high-yielding, mortgage-backed securities
will be adversely affected to the extent that prepayments of mortgages must be
reinvested in securities that have lower yields than the prepaid mortgages.
Moreover, prepayments of mortgages that underlie securities purchased at a
premium could result in capital losses. Investment in such securities also could
subject the Fund to "maturity extension risk," which is the possibility that
rising interest rates may cause prepayments to occur at a slower than expected
rate. This particular risk may effectively change a security that was considered
a short or intermediate-term security at the time of purchase into a long-term
security. Long-term securities generally fluctuate more widely in response to
changes in interest rates than short or intermediate-term securities.

The guarantees of the U.S. government, its agencies and instrumentalities are
guarantees of the timely payment of principal and interest on the obligations
purchased. The value of the shares issued by the Fund is not guaranteed and will
fluctuate with the value of the Fund's portfolio. Generally when the level of
interest rates rise, the value of the Fund's investment in government securities
is likely to decline and, when

the level of interest rates decline, the value of the Fund's investment in
government securities is likely to rise.

The Fund may engage in portfolio trading primarily to take advantage of yield
disparities. Such trading strategies may result in minor temporary increases or
decreases in the Fund's current income and in its holding of debt securities
that sell at substantial premiums or discounts from face value. If expectations
of changes in interest rates or the price of the securities prove to be
incorrect, the Fund's potential income and capital gain will be reduced or its
potential loss will be increased.

HIGH-YIELD, HIGH-RISK DEBT SECURITIES. The real estate securities, convertible
securities, bonds and other debt securities in which the Fund may invest may
include high-yield, high-risk debt securities rated BB or lower by Standard &
Poor's Corporation ("S&P") or Ba or lower by Moody's Investors Service
("Moody's") or unrated securities. Securities rated BB or lower by S&P and Ba or
lower by Moody's are referred to in the financial community as "junk bonds" and
may include D-rated securities of issuers in default. See Appendix A for a more
detailed description of the rating system. Ratings assigned by credit agencies
do not evaluate market risks. The Adviser considers the ratings assigned by S&P
or Moody's as one of several factors in its independent credit analysis of
issuers. A brief description of the quality ratings of these two services is
contained in the section titled "Quality Ratings of Debt Securities."

While likely to have some quality and protective characteristics, high-yield,
high-risk debt securities, whether convertible into common stock, usually
involve increased risk as to payment of principal and interest. Issuers of such
securities may be highly leveraged and may not have available to them
traditional methods of financing. Therefore, the risks associated with acquiring
the securities of such issuers generally are greater than is the case with
higher-rated securities. For example, during an economic downturn or a sustained
period of rising interest rates, issuers of high-yield securities may be more
likely to experience financial stress, especially if such issuers are highly
leveraged. During such periods, such issuers may not have sufficient revenues to
meet their principal and interest payment obligations. The issuer's ability to
service its debt obligations also may be adversely affected by specific issuer
developments, or the issuer's inability to meet specific projected business
forecasts or the unavailability of additional financing. The risk of loss due to
default by the issuer is significantly greater for the holders of high-yield
securities because such securities may be unsecured and may be subordinated to
other creditors of the issuer.

High-yield, high-risk debt securities are subject to greater price volatility
than higher-rated securities, tend to decline in price more steeply than
higher-rated securities in periods of economic difficulty or accelerating
interest rates and are subject to greater risk of non-payment in adverse
economic times. There may be a thin trading market for such securities. This may
have an adverse impact on market price and the ability of the Fund to dispose of
particular issues and may cause the Fund to incur special securities'
registration responsibilities, liabilities and costs, and liquidity and
valuation difficulties. Unexpected net redemptions may force the Fund to sell
high-yield, high-risk debt securities without regard to investment merit,
thereby possibly reducing return rates. Such securities may be subject to
redemptions or call provisions, which, if exercised when investment rates are
declining, could result in the replacement of such securities with
lower-yielding securities, resulting in a decreased return. To the extent that
the Fund invests in bonds that are original issue discount, zero-coupon,
pay-in-kind or deferred interest bonds, the Fund may have taxable interest
income greater than the cash actually received on these issues. In order to
avoid taxation to the Fund, the Fund may have to sell portfolio securities to
meet taxable distribution requirements.

The market values of such securities tend to reflect individual corporate
developments to a greater extent than do higher-rated securities, which react
primarily to fluctuations in the general level of interest rates. Such
lower-rated securities also tend to be more sensitive to economic and industry
conditions than are higher-rated securities. Adverse publicity and investor
perceptions, whether or not based on fundamental analysis regarding individual
lower-rated bonds, and the high-yield, high-risk market may depress the prices
for such securities. If the negative factors such as the aforementioned
adversely impact the market value of high-yield, high-risk securities, net asset
value will be adversely affected.

The Fund may have difficulty disposing of certain high-yield, high-risk bonds
because there may be a thin trading market for such bonds. Because not all
dealers maintain markets in all high-yield, high-risk bonds,

the Fund anticipates that such bonds could be sold only to a limited number of
dealers or institutional investors. The lack of a liquid secondary market may
have an adverse impact on market price and the ability to dispose of particular
issues and also may make it more difficult to obtain accurate market quotations
or valuations for purposes of valuing the Fund's assets. Market quotations
generally are available on many high-yield issues only from a limited number of
dealers and may not necessarily represent firm bid prices of such dealers or
prices for actual sales. In addition, adverse publicity and investor perceptions
may decrease the values and liquidity of high-yield, high-risk bonds regardless
of a fundamental analysis of the investment merits of such bonds. To the extent
that the Fund purchases illiquid or restricted bonds, it may incur special
securities' registration responsibilities, liabilities and costs, and liquidity
and valuation difficulties relating to such bonds.

Bonds may be subject to redemption or call provisions. If an issuer exercises
these provisions when investment rates are declining, the Fund will be likely to
replace such bonds with lower-yielding bonds, resulting in a decreased return.
Zero-coupon, pay-in-kind and deferred interest bonds involve additional special
considerations. Zero-coupon bonds are debt obligations that do not entitle the
holder to any periodic payments of interest prior to maturity or a specified
cash payment date when the securities begin paying current interest (the "cash
payment date") and therefore are issued and traded at a discount from their face
amount or par value. The market prices of zero-coupon securities generally are
more volatile than the market prices of securities that pay interest
periodically and are likely to respond to changes in interest rates to a greater
degree than do securities paying interest currently, having similar maturities
and credit quality. Pay-in-kind bonds pay interest in the form of other
securities rather than cash. Deferred interest bonds defer the payment of
interest to a later date. Zero-coupon, pay-in-kind or deferred interest bonds
carry additional risk in that, unlike bonds that pay interest in cash throughout
the period to maturity, the Fund will realize no cash until the cash payment
date unless a portion of such securities are sold. There is no assurance of the
value or the liquidity of securities received from pay-in-kind bonds. If the
issuer defaults, the Fund may obtain no return at all on their investment. To
the extent that the Fund invests in bonds that are original issue discount,
zero-coupon, pay-in-kind or deferred interest bonds, the Fund may have taxable
interest income greater than the cash actually received on these issues. In
order to distribute such income to avoid taxation, the Fund may have to sell
portfolio securities to meet its taxable distribution requirements under
circumstances that could be adverse.

Federal tax legislation limits the tax advantages of issuing certain high-yield,
high-risk bonds. This could have a materially adverse effect on the market for
high-yield, high-risk bonds.

A description of each bond quality category is set forth in Appendix A. The
ratings of Moody's and S&P represent their opinions as to the quality of the
securities that they undertake to rate. It should be emphasized, however, that
ratings are relative and subjective and are not absolute standards of quality.
There is no assurance that a rating assigned initially will not change. The Fund
may retain a security whose rating has changed or has become unrated.

CASH MANAGEMENT. For defensive purposes or to accommodate inflows of cash
awaiting more permanent investment, the Fund may temporarily and without
limitation hold high-grade short-term money market instruments, cash and cash
equivalents, including repurchase agreements. The Fund also may invest in other
investment companies (or companies exempted under Section 3(c)(7) of the 1940
Act) that themselves primarily invest in temporary defensive investments,
including commercial paper. To the extent that the management fees paid to the
other investment companies are for the same or similar services as the
management fees paid to the Fund, there will be a layering of fees that would
increase expenses and decrease returns. Investments in other investment
companies are limited by the 1940 Act.

REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements. Repurchase
agreements involve an agreement to purchase a security and to sell that security
back to the original owner at an agreed-on price. The resale price reflects the
purchase price plus an agreed-on incremental amount, which is unrelated to the
coupon rate or maturity of the purchased security. The repurchase obligation of
the seller is, in effect, secured by the underlying securities. In the event of
a bankruptcy or other default of a seller of a repurchase agreement, the Fund
could experience both delays in liquidating the underlying securities and
losses, including: (a) possible decline in the value of the collateral during
the period while the Fund seeks

to enforce its rights thereto, (b) possible loss of all or a part of the income
during this period, and (c) expenses of enforcing its rights.

The Fund will enter into repurchase agreements only when the seller agrees that
the value of the underlying securities, including accrued interest (if any),
will at all times be equal to or exceed the value of the repurchase agreement.
The Fund may enter into tri-party repurchase agreements in which a third-party
custodian bank ensures the timely and accurate exchange of cash and collateral.
The majority of these transactions run from day to day, and delivery pursuant to
the resale typically occurs within one to seven days of the purchase. The Fund
normally will not enter into repurchase agreements maturing in more than seven
days.

BORROWING. The Fund may borrow from banks and enter into reverse repurchase
agreements in an amount up to 33 1/3% of its total assets, taken at market
value. The Fund also may borrow up to an additional 5% of its total assets from
banks or others. The Fund may purchase additional securities so long as
borrowings do not exceed 5% of its total assets. The Fund may obtain such
short-term credit as may be necessary for the clearance of purchases and sales
of portfolio securities. In the event that market fluctuations cause borrowing
to exceed the limits stated above, the Adviser would act to remedy the situation
as promptly as possible (normally within three business days), although it is
not required to dispose of portfolio holdings immediately if the Fund would
suffer losses as a result. Borrowing money to meet redemptions or other purposes
would have the effect of temporarily leveraging the Fund's assets and
potentially exposing the Fund to leveraged losses.

LENDING PORTFOLIO SECURITIES. The Fund may lend its portfolio securities to
certain types of eligible borrowers approved by the Board of Directors. The Fund
may engage in securities lending to earn additional income or to raise cash for
liquidity purposes. The Fund must receive collateral for a loan. Under current
applicable regulatory requirements (which are subject to change), on each
business day the loan collateral must be at least equal to the value of the
loaned securities. The collateral must consist of cash, bank letters of credit,
securities of the U.S. government or its agencies or instrumentalities, or other
cash equivalents in which the Fund is permitted to invest.

Lending activities are strictly limited as described in the section titled
"Investment Restrictions." Lending money or securities involves the risk that
the Fund may suffer a loss if a borrower does not repay a loan when due. To
manage this risk the Fund deals only with counterparties it believes to be
creditworthy and requires that the counterparty deposit collateral with the
Fund.

When it loans securities, the Fund still owns the securities, receives amounts
equal to the dividends or interest on loaned securities and is subject to gains
or losses on those securities. The Fund also receives one or more of: (a)
negotiated loan fees, (b) interest on securities used as collateral, and/or (c)
interest on any short-term debt instruments purchased with such loan collateral.
Either type of interest may be shared with the borrower. The Fund also may pay
reasonable finder's, custodian and administrative fees in connection with these
loans. The terms of the Fund's loans must meet applicable tests under the
Internal Revenue Code and must permit the Fund to reacquire loaned securities on
five days' notice or in time to vote on any important matter.

HEADLINE RISK. We seek to acquire companies with expanding earnings at value
prices. We may make such investments when a company becomes the center of
controversy after receiving adverse media attention. The company may be involved
in litigation, the company's financial reports or corporate governance may be
challenged, the company's annual report may disclose a weakness in internal
controls, investors may question the company's published financial reports,
greater government regulation may be contemplated, or other adverse events may
threaten the company's future. While we research companies subject to such
contingencies, we cannot be correct every time, and the company's stock may
never recover.

SHORT SALES. When the Fund believes that a security is overvalued, it may sell
the security short and borrow the same security from a broker or other
institution to complete the sale. If the price of the security decreases in
value, the Fund may make a profit and, conversely, if the security increases in
value, the Fund will incur a loss because it will have to replace the borrowed
security by purchasing it at a higher price.

There can be no assurance that the Fund will be able to close out the short
position at any particular time or at an acceptable price. Although the Fund's
gain is limited to the amount at which it sold a security short, its potential
loss is not limited. A lender may request that the borrowed securities be
returned on short notice; if that occurs at a time when other short sellers of
the subject security are receiving similar requests, a "short squeeze" can
occur. This means that the Fund might be compelled, at the most disadvantageous
time, to replace borrowed securities previously sold short with purchases on the
open market at prices significantly greater than those at which the securities
were sold short. Short selling also may produce higher than normal portfolio
turnover and result in increased transaction costs to the Fund. If the Fund
sells a security short it will either own an offsetting "long position" (an
economically equivalent security which is owned) or establish a "Segregated
Account" as described in this Statement of Additional Information.

The Fund also may make short sales "against-the-box," in which it sells short
securities it owns. The Fund will incur transaction costs, including interest
expenses, in connection with opening, maintaining and closing short sales
against-the-box, which result in a "constructive sale," requiring the Fund to
recognize any taxable gain from the transaction.

The Fund has adopted a non-fundamental investment limitation that prevents it
from selling any security short if it would cause more than 5% of its total
assets, taken at market value, to be sold short. This limitation does not apply
to selling short against the box.

RESTRICTED AND ILLIQUID SECURITIES. The Fund may invest in restricted securities
that are subject to contractual restrictions on resale. The Fund's policy is to
not purchase or hold illiquid securities (which may include restricted
securities) if more than 15% of the Fund's net assets would then be illiquid.

The restricted securities that the Fund may purchase include securities that
have not been registered under the 1933 Act but are eligible for purchase and
sale pursuant to Rule 144A ("Rule 144A Securities"). This Rule permits certain
qualified institutional buyers, such as the Fund, to trade in privately placed
securities even though such securities are not registered under the 1933 Act.
The Adviser, under criteria established by the Fund's Board of Directors, will
consider whether Rule 144A Securities being purchased or held by the Fund are
illiquid and thus subject to the Fund's policy limiting investments in illiquid
securities. In making this determination, the Adviser will consider the
frequency of trades and quotes, the number of dealers and potential purchasers,
dealer undertakings to make a market and the nature of the security and the
marketplace trades (for example, the time needed to dispose of the security, the
method of soliciting offers and the mechanics of transfer). The liquidity of
Rule 144A Securities also will be monitored by the Adviser and, if as a result
of changed conditions it is determined that a Rule 144A Security is no longer
liquid, the Fund's holding of illiquid securities will be reviewed to determine
what, if any, action is required in light of the policy limiting investments in
such securities. Investing in Rule 144A Securities could have the effect of
increasing the amount of investments in illiquid securities if qualified
institutional buyers are unwilling to purchase such securities.

WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS. The Fund can invest in securities
on a "when-issued" basis and can purchase or sell securities on a
"delayed-delivery" basis. When-issued and delayed-delivery are terms that refer
to securities whose terms and indenture are available and for which a market
exists but that are not available for immediate delivery.

When such transactions are negotiated, the price (which generally is expressed
in yield terms) is fixed at the time the commitment is made. Delivery and
payment for the securities take place at a later date (generally within 45 days
of the date the offer is accepted). The securities are subject to change in
value from market fluctuations during the period until settlement. The value at
delivery may be less than the purchase price. For example, changes in interest
rates in a direction other than that expected by the Adviser before settlement
will affect the value of such securities and may cause a loss to the Fund.
During the period between purchase and settlement, no payment is made by the
Fund to the issuer and no interest accrues to the Fund from the investment.

The Fund may engage in when-issued transactions to secure what the Adviser
considers to be an advantageous price and yield at the time of entering into the
obligation. When the Fund enters into a when-

issued or delayed-delivery transaction, it relies on the other party to complete
the transaction. Its failure to do so may cause the Fund to lose the opportunity
to obtain the security at a price and yield the Adviser considers to be
advantageous. When the Fund engages in when-issued and delayed-delivery
transactions, it does so for the purpose of acquiring or selling securities
consistent with its investment objective and strategies or for delivery pursuant
to options contracts it has entered into, and not for the purpose of investment
leverage. Although the Fund will enter into delayed-delivery or when-issued
purchase transactions to acquire securities, it can dispose of a commitment
before settlement. If the Fund chooses to dispose of the right to acquire a
when-issued security before its acquisition or to dispose of its right to
delivery or receive against a forward commitment, it may incur a gain or loss.

At the time the Fund makes the commitment to purchase or sell a security on a
when-issued or delayed-delivery basis, it records the transaction on its books
and reflects the value of the security purchased in determining the Fund's net
asset value. In a sale transaction, it records the proceeds to be received. The
Fund will identify on its books liquid securities of any type at least equal in
value to the value of the Fund's purchase commitments until the Fund pays for
the investment.

When issued and delayed-delivery transactions can be used by the Fund as a
defensive technique to hedge against anticipated changes in interest rates and
prices. For instance, in periods of rising interest rates and falling prices,
the Fund might sell securities in its portfolio on a forward commitment basis to
attempt to limit its exposure to anticipated falling prices. In periods of
falling interest rates and rising prices, the Fund might sell portfolio
securities and purchase the same or similar securities on a when-issued or
delayed-delivery basis to obtain the benefit of currently higher cash yields.

A segregated account is not required when the Fund holds securities, options or
futures positions whose values are expected to offset its obligations that would
otherwise require a segregated account.

SEGREGATED ACCOUNTS. A number of the Fund's investment strategies require it to
establish segregated accounts. When the Fund enters into an investment strategy
that would result in a "senior security" as that term is defined in the 1940
Act, the Fund will either: (i) own an offsetting position in securities, options
or futures positions; or (ii) set aside liquid securities in a segregated
account with its custodian bank (or designated in the Fund's books and records)
in the amount prescribed. The Fund will maintain the value of such segregated
account equal to the prescribed amount by adding or removing additional liquid
securities to account for fluctuations in the value of securities held in such
account. Securities held in a segregated account cannot be sold while the senior
security is outstanding, unless they are replaced with similar securities.

DERIVATIVES. The Fund can invest in a variety of derivative investments to
pursue its investment objective or for hedging purposes. Some derivative
investments the Fund can use are the hedging instruments described below.

Hedging. The Fund can use hedging to attempt to protect against declines in the
market value of the Fund's portfolio, to permit the Fund to retain unrealized
gains in the value of portfolio securities that have appreciated or to
facilitate selling securities for investment reasons. To do so, the Fund could:

o sell futures contracts;
o buy puts on such futures or on securities; or
o write covered calls on securities or futures.

The Fund can use hedging to establish a position in the securities market as a
temporary substitute for purchasing particular securities. In that case, the
Fund would normally seek to purchase the securities and then terminate that
hedging position. The Fund might also use this type of hedge to attempt to
protect against the possibility that its portfolio securities would not be fully
included in a rise in value of the market. To do so the Fund could:

o buy futures; or
o buy calls on such futures or on securities.

The Fund is not obligated to use hedging instruments, even though it is
permitted to use them in the Adviser's discretion, as described below. The
Fund's strategy of hedging with futures and options on futures will be
incidental to the Fund's activities in the underlying cash market. The
particular hedging instruments the Fund can use are described below. The Fund
can employ new hedging instruments and strategies when they are developed, if
those investment methods are consistent with the Fund's investment objective and
are permissible under applicable regulations governing the Fund.

Futures. The Fund can buy and sell futures contracts that relate to: (1)
broad-based stock indices ("stock index futures"), (2) debt securities (these
are referred to as "interest rate futures"), (3) other broad-based securities
indices (these are referred to as "financial futures"), (4) foreign currencies
(these are referred to as "forward contracts"), or (5) commodities (these are
referred to as "commodity futures").

A broad-based stock index is used as the basis for trading stock index futures.
They may in some cases be based on stocks of issuers in a particular industry or
group of industries. A stock index assigns relative values to the common stocks
included in the index and its value fluctuates in response to the changes in
value of the underlying stocks. A stock index cannot be purchased or sold
directly. Financial futures are similar contracts based on the future value of
the basket of securities that comprise the index. These contracts obligate the
seller to deliver, and the purchaser to take, cash to settle the futures
transaction. There is no delivery made of the underlying securities to settle
the futures obligation. Either party also may settle the transaction by entering
into an offsetting contract.

An interest rate future obligates the seller to deliver (and the purchaser to
take) cash or a specified type of debt security to settle the futures
transaction. Either party also could enter into an offsetting contract to close
out the position.

No money is paid or received by the Fund on the purchase or sale of a future. On
entering into a futures transaction, the Fund will be required to deposit an
initial margin payment with the futures commission merchant (the "futures
broker"). Initial margin payments will be deposited with the Fund's custodian
bank in an account registered in the futures broker's name. However, the futures
broker can gain access to that account only under specified conditions. As the
future is marked to market (that is, its value on the Fund's books is changed)
to reflect changes in its market value, subsequent margin payments, called
variation margin, will be paid to or by the futures broker daily.

At any time before expiration of the future, the Fund can elect to close out its
position by taking an opposite position, at which time a final determination of
variation margin is made and any additional cash must be paid by or released to
the Fund. Any loss or gain on the future is then realized by the Fund for tax
purposes. All futures transactions, except forward contracts, are effected
through a clearinghouse associated with the exchange on which the contracts are
traded.

Put and Call Options. The Fund can buy and sell certain kinds of put options
("puts") and call options ("calls"). The Fund can buy and sell exchange-traded
and over-the-counter put and call options, including index options, securities
options, currency options, commodities options and options on the other types of
futures described above.

Writing Covered Call Options. The Fund can write (that is, sell) covered calls.
If the Fund sells a call option, it must be covered. That means the Fund must
own the security subject to the call while the call is outstanding or, for
certain types of calls, the call can be covered by identifying liquid assets on
the Fund's books to enable the Fund to satisfy its obligations if the call is
exercised.

When the Fund writes a call on a security, it receives cash (a premium). The
Fund agrees to sell the underlying security to a purchaser of a corresponding
call on the same security during the call period at a fixed exercise price
regardless of market price changes during the call period. The call period is
usually not more than nine months. The exercise price may differ from the market
price of the underlying security. The Fund has the risk of loss that the price
of the underlying security may decline during the call period. That risk may be
offset to some extent by the premium the Fund receives. If the value of the
investment does not

rise above the call price, it is likely that the call will lapse without being
exercised. In that case, the Fund would keep the cash premium and the
investment.

When the Fund writes a call on an index, it receives cash (a premium). If the
buyer of the call exercises it, the Fund will pay an amount of cash equal to the
difference between the closing price of the call and the exercise price,
multiplied by a specified multiple that determines the total value of the call
for each point of difference. If the value of the underlying investment does not
rise above the call price, it is likely that the call will lapse without being
exercised. In that case the Fund would keep the cash premium.

The Fund's custodian bank, or a securities depository acting for the custodian
bank, will act as the Fund's escrow agent, through the facilities of the Options
Clearing Corporation ("OCC"), as to the investments on which the Fund has
written calls traded on exchanges or as to other acceptable escrow securities.
In that way, no margin will be required for such transactions. OCC will release
the securities on the expiration of the option or when the Fund enters into a
closing transaction.

When the Fund writes an over-the-counter ("OTC") option, it will treat as
illiquid (for purposes of its restriction on holding illiquid securities) the
marked-to-market value of any OTC option it holds, unless the option is subject
to a buy-back agreement by the executing broker. To terminate its obligation on
a call it has written, the Fund can purchase a corresponding call in a "closing
purchase transaction." The Fund will then realize a profit or loss, depending on
whether the net of the amount of the option transaction costs and the premium
received on the call the Fund wrote is more or less than the price of the call
the Fund purchases to close out the transaction. The Fund may realize a profit
if the call expires unexercised, because the Fund will retain the underlying
security and the premium it received when it wrote the call. Any such profits
are considered short-term capital gains for federal income tax purposes, as are
the premiums on lapsed calls. When distributed by the Fund, they are taxable as
ordinary income. If the Fund cannot effect a closing purchase transaction due to
the lack of a market, it will have to hold the callable securities until the
call expires or is exercised.

The Fund also can write calls on a futures contract without owning the futures
contract or securities deliverable under the contract. To do so, at the time the
call is written, the Fund must cover the call by identifying an equivalent
dollar amount of liquid assets on the Fund's books. The Fund will identify
additional liquid assets on its books if the value of the segregated assets
drops below 100% of the current value of the future. Because of this segregation
requirement, in no circumstances would the Fund's receipt of an exercise notice
as to that future require the Fund to deliver a futures contract. It would
simply put the Fund in a short futures position, which is permitted by the
Fund's hedging policies.

Writing Put Options. The Fund can sell put options. A put option on securities
gives the purchaser the right to sell, and the writer the obligation to buy, the
underlying investment at the exercise price during the option period.

If the Fund writes a put, the put must be covered by liquid assets identified on
the Fund's books. The premium the Fund receives from writing a put represents a
profit, as long as the price of the underlying investment remains equal to or
above the exercise price of the put. However, the Fund also assumes the
obligation during the option period to buy the underlying investment from the
buyer of the put at the exercise price, even if the value of the investment
falls below the exercise price. If a put the Fund has written expires
unexercised, the Fund realizes a gain in the amount of the premium less the
transaction costs incurred. If the put is exercised, the Fund must fulfill its
obligation to purchase the underlying investment at the exercise price. That
price usually will exceed the market value of the investment at that time. In
that case, the Fund may incur a loss if it sells the underlying investment. That
loss will be equal to the sum of the sale price of the underlying investment and
the premium received minus the sum of the exercise price and any transaction
costs the Fund incurred.

When writing a put option on a security, to secure its obligation to pay for the
underlying security the Fund will deposit in escrow liquid assets with a value
equal to or greater than the exercise price of the underlying securities. The
Fund therefore foregoes the opportunity of investing the segregated assets or
writing calls against those assets.

As long as the Fund's obligation as the put writer continues, it may be assigned
an exercise notice by the broker-dealer through which the put was sold. That
notice will require the Fund to take delivery of the underlying security and pay
the exercise price. The Fund has no control over when it may be required to
purchase the underlying security, since it may be assigned an exercise notice at
any time prior to the termination of its obligation as the writer of the put.
That obligation terminates on expiration of the put. It also may terminate if,
before it receives an exercise notice, the Fund effects a closing purchase
transaction by purchasing a put of the same series as it sold. Once the Fund has
been assigned an exercise notice, it cannot effect a closing purchase
transaction.

The Fund can decide to effect a closing purchase transaction to realize a profit
on an outstanding put option it has written or to prevent the underlying
security from being put. Effecting a closing purchase transaction also will
permit the Fund to write another put option on the security or to sell the
security and use the proceeds from the sale for other investments. The Fund will
realize a profit or loss from a closing purchase transaction depending on
whether the cost of the transaction is less or more than the premium received
from writing the put option. Any profits from writing puts are considered
short-term capital gains for federal tax purposes and, when distributed by the
Fund, are taxable as ordinary income.

Purchasing Calls and Puts. The Fund can purchase calls to protect against the
possibility that the Fund's portfolio will not participate in an anticipated
rise in the securities market. When the Fund buys a call (other than in a
closing purchase transaction), it pays a premium. The Fund then has the right to
buy the underlying investment from a seller of a corresponding call on the same
investment during the call period at a fixed exercise price. The Fund benefits
only if it sells the call at a profit or if, during the call period, the market
price of the underlying investment is above the sum of the call price plus the
transaction costs and the premium paid for the call and the Fund exercises the
call. If the Fund does not exercise the call or sell it (whether or not at a
profit), the call will become worthless at its expiration date. In that case the
Fund will have paid the premium but lost the right to purchase the underlying
investment.

The Fund can buy puts whether it holds the underlying investment in its
portfolio. When the Fund purchases a put, it pays a premium and, except as to
puts on indices, has the right to sell the underlying investment to a seller of
a put on a corresponding investment during the put period at a fixed exercise
price. Buying a put on securities or futures the Fund owns enables the Fund to
attempt to protect itself during the put period against a decline in the value
of the underlying investment below the exercise price by selling the underlying
investment at the exercise price to a seller of a corresponding put. If the
market price of the underlying investment is equal to or above the exercise
price and, as a result, the put is not exercised or resold, the put will become
worthless at its expiration date. In that case the Fund will have paid the
premium but lost the right to sell the underlying investment. However, the Fund
can sell the put prior to its expiration. That sale may or may not be at a
profit.

When the Fund purchases a call or put on an index or future, it pays a premium,
but settlement is in cash rather than by delivery of the underlying investment
to the Fund. Gain or loss depends on changes in the index in question (and thus
on price movements in the securities market generally) rather than on price
movements in individual securities or futures contracts.

Forward Contracts. Forward contracts are foreign currency exchange contracts.
They are used to buy or sell foreign currency for future delivery at a fixed
price. The Fund uses them to "lock in" the U.S. dollar price of a security
denominated in a foreign currency that the Fund has bought or sold, or to
protect against possible losses from changes in the relative values of the U.S.
dollar and a foreign currency. The Fund limits its exposure in foreign currency
exchange contracts in a particular foreign currency to the amount of its assets
denominated in that currency or a closely correlated currency. The Fund also can
use "cross-hedging" where the Fund hedges against changes in currencies other
than the currency in which a security it holds is denominated.

Under a forward contract, one party agrees to purchase, and another party agrees
to sell, a specific currency at a future date. That date may be any fixed number
of days from the date of the contract agreed on by the parties. The transaction
price is set at the time the contract is entered into. These contracts are
traded in the

inter-bank market conducted directly among currency traders (usually large
commercial banks) and their customers.

The Fund can use forward contracts to protect against uncertainty in the level
of future exchange rates. The use of forward contracts does not eliminate the
risk of fluctuations in the prices of the underlying securities the Fund owns or
intends to acquire, but it does fix a rate of exchange in advance. Although
forward contracts may reduce the risk of loss from a decline in the value of the
hedged currency, at the same time they limit any potential gain if the value of
the hedged currency increases.

When the Fund enters into a contract for the purchase or sale of a security
denominated in a foreign currency, or when it anticipates receiving dividend
payments in a foreign currency, the Fund might desire to "lock in" the U.S.
dollar price of the security or the U.S. dollar equivalent of the dividend
payments. To do so, the Fund might enter into a forward contract for the
purchase or sale of the amount of foreign currency involved in the underlying
transaction, in a fixed amount of U.S. dollars per unit of the foreign currency.
This is called a "transaction hedge." The transaction hedge will protect the
Fund against a loss from an adverse change in the currency exchange rates during
the period between the date on which the security is purchased or sold or on
which the payment is declared and the date on which the payments are made or
received.

The Fund also could use forward contracts to lock in the U.S. dollar value of
portfolio positions. This is called a "position hedge." When the Fund believes
that foreign currency might suffer a substantial decline against the U.S.
dollar, it could enter into a forward contract to sell an amount of that foreign
currency approximating the value of some or all of the Fund's portfolio
securities denominated in that foreign currency. When the Fund believes that the
U.S. dollar may suffer a substantial decline against a foreign currency, it
could enter into a forward contract to buy that foreign currency for a fixed
dollar amount. Alternatively, the Fund could enter into a forward contract to
sell a different foreign currency for a fixed U.S. dollar amount if the Fund
believes that the U.S. dollar value of the foreign currency to be sold pursuant
to its forward contract will fall whenever there is a decline in the U.S. dollar
value of the currency in which portfolio securities of the Fund are denominated.
That is referred to as a "cross hedge."

The Fund will cover its short positions in these cases by identifying to its
custodian bank assets having a value equal to the aggregate amount of the Fund's
commitment under forward contracts. The Fund will not enter into forward
contracts or maintain a net exposure to such contracts if the consummation of
the contracts would obligate the Fund to deliver an amount of foreign currency
in excess of the value of the Fund's portfolio securities or other assets
denominated in that currency or another currency that is the subject of the
hedge. However, to avoid excess transactions and transaction costs, the Fund can
maintain a net exposure to forward contracts in excess of the value of the
Fund's portfolio securities or other assets denominated in foreign currencies if
the excess amount is "covered" by liquid securities denominated in any currency.
The cover must be at least equal at all times to the amount of that excess. As
one alternative, the Fund can purchase a call option permitting the Fund to
purchase the amount of foreign currency being hedged by a forward sale contract
at a price no higher than the forward contract price. As another alternative,
the Fund can purchase a put option permitting the Fund to sell the amount of
foreign currency subject to a forward purchase contract at a price as high as or
higher than the forward contact price.

The precise matching of the amounts under forward contracts and the value of the
securities involved generally will not be possible because the future value of
securities denominated in foreign currencies will change as a consequence of
market movements between the date the forward contract is entered into and the
date it is sold. In some cases the Adviser might decide to sell the security and
deliver foreign currency to settle the original purchase obligation. If the
market value of the security is less than the amount of foreign currency the
Fund is obligated to deliver, the Fund might have to purchase additional foreign
currency on the "spot" (that is, cash) market to settle the security trade. If
the market value of the security instead exceeds the amount of foreign currency
that the Fund is obligated to deliver to settle the trade, the Fund might have
to sell on the spot market some of the foreign currency received on the sale of
the security. There will be additional transaction costs on the spot market in
those cases.

The projection of short-term currency market movements is extremely difficult,
and the successful execution of a short-term hedging strategy is highly
uncertain. Forward contracts involve the risk that anticipated currency
movements would not be accurately predicted, causing the Fund to sustain losses
on these contracts and to pay additional transactions costs. The use of forward
contracts in this manner might reduce the Fund's performance if there are
unanticipated changes in currency prices to a greater degree than if the Fund
had not entered into such contracts.

At or before the maturity of a forward contract requiring the Fund to sell a
currency, the Fund might sell a portfolio security and use the sale proceeds to
make delivery of the currency. In the alternative, the Fund might retain the
security and offset its contractual obligation to deliver the currency by
purchasing a second contract. Under that contract the Fund will obtain, on the
same maturity date, the same amount of the currency that it is obligated to
deliver. Similarly, the Fund might close out a forward contract requiring it to
purchase a specified currency by entering into a second contract entitling it to
sell the same amount of the same currency on the maturity date of the first
contract. The Fund would realize a gain or loss as a result of entering into
such an offsetting forward contract under either circumstance. The gain or loss
will depend on the extent to which the exchange rate or rates between the
currencies involved moved between the execution dates of the first and
offsetting contracts.

The cost to the Fund of engaging in forward contracts varies with factors such
as the currencies involved, the length of the contract period and the market
conditions then prevailing. Because forward contracts usually are entered into
on a principal basis, no brokerage fees or commissions are involved. Because
these contracts are not traded on an exchange, the Fund must evaluate the credit
and performance risk of the counterparty under each forward contract.

Although the Fund values its assets daily in terms of U.S. dollars, it does not
intend to convert its holdings of foreign currencies into U.S. dollars on a
daily basis. The Fund can convert foreign currency from time to time and will
incur costs in doing so. Foreign exchange dealers do not charge a fee for
conversion, but they do seek to realize a profit based on the difference between
the prices at which they buy and sell various currencies. Thus, a dealer might
offer to sell a foreign currency to the Fund at one rate, while offering a
lesser rate of exchange if the Fund desires to resell that currency to the
dealer.

Index-Linked Notes. Principal and/or interest payments on these notes depend on
the performance of an underlying index. Currency-indexed securities are another
derivative the Fund can use. Typically these are short-term or intermediate-term
debt securities. Their value at maturity or the rates at which they pay income
are determined by the change in value of the U.S. dollar against one or more
foreign currencies or an index. In some cases, these securities may pay an
amount at maturity based on a multiple of the amount of the relative currency
movements. This type of index security offers the potential for increased income
or principal payments but at a greater risk of loss than a typical debt security
of the same maturity and credit quality.

Debt Exchangeable for Common Stock of an Issuer or "Equity-Linked Debt
Securities" of an Issuer. At maturity, the debt security is exchanged for common
stock of the issuer or it is payable in an amount based on the price of the
issuer's common stock at the time of maturity. Both alternatives present a risk
that the amount payable at maturity will be less than the principal amount of
the debt because the price of the issuer's common stock might not be as high as
the Adviser expected.

Interest Rate Swap Transactions. The Fund can enter into interest rate swap
agreements. In an interest rate swap, the Fund and another party exchange their
right to receive or their obligation to pay interest on a security. For example,
they might swap the right to receive floating rate payments for fixed rate
payments. The Fund can enter into swaps only on securities that it owns. Also,
the Fund will identify liquid assets on its books (such as cash or U.S.
government securities) to cover any amounts it could owe under swaps that exceed
the amounts it is entitled to receive, and it will adjust that amount daily as
needed.

Swap agreements entail both interest rate risk and credit risk. There is a risk
that, based on movements of interest rates in the future, the payments made by
the Fund under a swap agreement will be greater than the payments it received.
Credit risk arises from the possibility that the counterparty will default. If
the

counterparty defaults, the Fund's loss will consist of the net amount of
contractual interest payments that the Fund has not yet received. The Adviser
will monitor the creditworthiness of counterparties to the Fund's interest rate
swap transactions on an ongoing basis.

The Fund can enter into swap transactions with certain counterparties pursuant
to master netting agreements. A master netting agreement provides that all swaps
done between the Fund and that counterparty shall be regarded as parts of an
integral agreement. If amounts are payable on a particular date in the same
currency in respect of one or more swap transactions, the amount payable on that
date in that currency shall be the net amount. In addition, the master netting
agreement may provide that if one party defaults generally or on one swap, the
counterparty can terminate all of the swaps with that party. Under these
agreements, if a default results in a loss to one party, the measure of that
party's damages is calculated by reference to the average cost of a replacement
swap for each swap. It is measured by the mark-to-market value at the time of
the termination of each swap. The gains and losses on all swaps are then netted,
and the result is the counterparty's gain or loss on termination. The
termination of all swaps and the netting of gains and losses on termination
generally is referred to as "aggregation."

Hedging Foreign Currency. To attempt to reduce exposure to currency
fluctuations, the Fund may trade in forward foreign currency exchange contracts
(forward contracts), currency futures contracts and options thereon and
securities indexed to foreign securities. These techniques are not always
effective and their use may expose the Fund to other risks, such as liquidity
and counterparty risk. The Adviser exercises its professional judgment as to
whether the reduction in currency risk justifies the expense and exposure to
liquidity and counterparty risk. These techniques may be used to lock in an
exchange rate in connection with transactions in securities denominated or
traded in foreign currencies, to hedge the currency risk in foreign securities
held by the Fund and to hedge a currency risk involved in an anticipated
purchase of foreign securities. Cross-hedging also may be utilized; that is,
entering into a hedge transaction with respect to a foreign currency different
from the one in which a trade is to be made or in which a portfolio security is
principally traded. There is no limitation on the amount of assets that may be
committed to currency hedging. However, the currency hedging transactions may be
utilized as a tool to reduce currency fluctuation risks due to a current or
anticipated position in foreign securities. The successful use of currency
hedging transactions usually depends on the Adviser's ability to forecast
interest rate and currency exchange rate movements. Should interest or exchange
rates move in an unexpected manner, the anticipated benefits of futures
contracts, options or forward contracts may not be achieved or losses may be
realized and thus the Fund could be in a worse position than if such strategies
had not been used. Unlike many exchange-traded futures contracts, there are no
daily price fluctuation limits with respect to options on currencies and forward
contracts, and adverse market movements therefore could continue to an unlimited
extent over a period of time. In addition, the correlation between movements in
the prices of such instruments and movements in the prices of the securities and
currencies hedged or used for cover will not be perfect and could produce
unanticipated losses. Unanticipated changes in currency prices may result in
poorer overall performance for the Fund than if it had not entered into such
contracts. When taking a position in an anticipatory hedge (when the Fund
purchases a futures contract or other similar instrument to gain market exposure
in anticipation of purchasing the underlying securities at a later date), the
Fund is required to set aside cash or high-grade liquid securities to fully
secure the obligation.

A forward contract is an obligation to purchase or sell a specific currency for
an agreed price at a future date that is individually negotiated and privately
traded by currency traders and their customers. Such a contract gives the Fund a
position in a negotiated, currently non-regulated market. The Fund may enter
into a forward contract; for example, when it enters into a contract for the
purchase or sale of a security denominated in a foreign currency in order to
"lock in" the U.S. dollar price of the security ("transaction hedge").
Additionally, when the Adviser believes that a foreign currency may suffer a
substantial decline against the U.S. dollar, the Fund may enter into a forward
sale contract to sell an amount of that foreign currency approximating the value
of some or all of the Fund's portfolio securities denominated in such foreign
currency. When the Adviser believes that the U.S. dollar may suffer a
substantial decline against a foreign currency, the Fund may enter into a
forward purchase contract to buy that foreign currency for a fixed dollar amount
in anticipation of purchasing foreign traded securities ("position hedge"). In
this situation the Fund may, in the alternative, enter into a forward contract
with respect to a different foreign currency for a fixed U.S. dollar amount
("cross hedge"). This may be done, for example, where the Adviser

believes that the U.S. dollar value of the currency to be sold pursuant to the
forward contract will fall whenever there is a decline in the U.S. dollar value
of the currency in which portfolio securities of the Fund are denominated.

The Fund may purchase and write put and call options on foreign currencies for
the purpose of protecting against declines in the U.S. dollar value of foreign
currency-denominated portfolio securities and against increases in the U.S.
dollar cost of such securities to be acquired. As in the case of other kinds of
options, however, the writing of an option on a foreign currency constitutes
only a partial hedge, up to the amount of the premium received, and the Fund
could be required to purchase or sell foreign currencies at disadvantageous
exchange rates, thereby incurring losses. The purchase of an option on a foreign
currency may constitute an effective hedge against fluctuations in exchange
rates although, in the event of rate movements adverse to the Fund's position,
it may forfeit the entire amount of the premium plus related transaction costs.
Options on foreign currencies to be written or purchased by the Fund are traded
on U.S. and foreign exchanges or over-the-counter. Currently, a significant
portion or all of the value of an over-the-counter option may be treated as an
illiquid investment and subject to the restriction on such investments as long
as the Securities and Exchange Commission ("SEC") requires that over-the-counter
options be treated as illiquid. Generally, the Fund would utilize options traded
on exchanges where the options are standardized.

The Fund may enter into contracts for the purchase or sale for future delivery
of foreign currencies ("currency futures contracts") and may purchase and write
put and call options to buy or sell currency futures contracts. A "sale" of a
currency futures contract means the acquisition of a contractual obligation to
deliver the foreign currencies called for by the contract at a specified price
on a specified date. A "purchase" of a currency futures contract means the
incurring of a contractual obligation to acquire the foreign currencies called
for by the contract at a specified price on a specified date. Options on
currency futures contracts to be purchased by the Fund will be traded on U.S. or
foreign exchanges or over-the-counter.

The Fund also may purchase securities (debt securities or deposits) that have
their coupon rate or value at maturity determined by reference to the value of
one or more foreign currencies. These strategies will be used for hedging
purposes only. The Fund will hold securities or other options or futures
positions whose values are expected to offset its obligations under the hedge
strategies. The Fund will not enter into a currency hedging position that
exposes the Fund to an obligation to another party unless it follows its
segregated account procedures.

The Fund's ability to dispose of its positions in futures contracts, options and
forward contracts will depend on the availability of liquid markets in such
instruments. Markets in options and futures with respect to currencies still are
developing. It is impossible to predict the amount of trading interest that may
exist in various types of futures contracts, options and forward contracts. If a
secondary market does not exist with respect to an option purchased or written
by the Fund over-the-counter, it might not be possible to effect a closing
transaction in the option (i.e., dispose of the option) with the result that:
(i) an option purchased by the Fund would have to be exercised in order for the
Fund to realize any profit; and (ii) the Fund may not be able to sell currencies
covering an option written by the Fund until the option expires or it delivers
the underlying futures currency on exercise. Therefore, no assurance can be
given that the Fund will be able to utilize these instruments effectively for
the purposes set forth above. The Fund's ability to engage in currency hedging
transactions may be limited by tax considerations.

Risks of Hedging With Options and Futures. The use of hedging instruments
requires special skills and knowledge of investment techniques that are
different than what is required for normal portfolio management. If the Adviser
uses a hedging instrument at the wrong time or judges market conditions
incorrectly, hedging strategies may reduce the Fund's return. The Fund also
could experience losses if the prices of its futures and options positions were
not correlated with its other investments.

The Fund's option activities could affect its portfolio turnover rate and
brokerage commissions. The exercise of calls written by the Fund might cause the
Fund to sell related portfolio securities, thus increasing its turnover rate.
The exercise by the Fund of puts on securities will cause the sale of underlying

investments, increasing portfolio turnover. Although the decision whether to
exercise a put it holds is within the Fund's control, holding a put might cause
the Fund to sell the related investments for reasons that would not exist in the
absence of the put.

The Fund could pay a brokerage commission each time it buys a call or put, sells
a call or put, or buys or sells an underlying investment in connection with the
exercise of a call or put. Those commissions could be higher on a relative basis
than the commissions for direct purchases or sales of the underlying
investments. Premiums paid for options are small in relation to the market value
of the underlying investments. Consequently, put and call options offer large
amounts of leverage. The leverage offered by trading in options could result in
the Fund's net asset value being more sensitive to changes in the value of the
underlying investment.

If a covered call written by the Fund is exercised on an investment that has
increased in value, the Fund will be required to sell the investment at the call
price. It will not be able to realize any profit if the investment has increased
in value above the call price.

An option position may be closed out only on a market that provides secondary
trading for options of the same series, and there is no assurance that a liquid
secondary market will exist for any particular option. The Fund might experience
losses if it could not close out a position because of an illiquid market for
the future or option.

There is a risk in using short hedging by selling futures or purchasing puts on
broad-based indices or futures to attempt to protect against declines in the
value of the Fund's portfolio securities. The risk is that the prices of the
futures or the applicable index will correlate imperfectly with the behavior of
the cash prices of the Fund's securities. For example, it is possible that while
the Fund has used hedging instruments in a short hedge, the market might advance
and the value of the securities held in the Fund's portfolio might decline. If
that occurred, the Fund would lose money on the hedging instruments and also
experience a decline in the value of its portfolio securities. However, while
this could occur for a very brief period or to a very small degree, over time
the value of a diversified portfolio of securities will tend to move in the same
direction as the indices on which the hedging instruments are based. The risk of
imperfect correlation increases as the composition of the Fund's portfolio
diverges from the securities included in the applicable index. To compensate for
the imperfect correlation of movements in the price of the portfolio securities
being hedged and movements in the price of the hedging instruments, the Fund
might use hedging instruments in a greater dollar amount than the dollar amount
of portfolio securities being hedged. It might do so if the historical
volatility of the prices of the portfolio securities being hedged is more than
the historical volatility of the applicable index.

The ordinary spreads between prices in the cash and futures markets are subject
to distortions, due to differences in the nature of those markets. First, all
participants in the futures market are subject to margin deposit and maintenance
requirements. Rather than meeting additional margin deposit requirements,
investors may close futures contracts through offsetting transactions that could
distort the normal relationship between the cash and futures markets. Second,
the liquidity of the futures market depends on participants entering into
offsetting transactions rather than making or taking delivery. To the extent
participants decide to make or take delivery, liquidity in the futures market
could be reduced, thus producing distortion. Third, from the point of view of
speculators, the deposit requirements in the futures market are less onerous
than margin requirements in the securities markets. Therefore, increased
participation by speculators in the futures market may cause temporary price
distortions.

The Fund can use hedging instruments to establish a position in the securities
markets as a temporary substitute for the purchase of individual securities
(long hedging) by buying futures and/or calls on such futures, broad-based
indices or on securities. It is possible that when the Fund does so, the market
might decline. If the Fund then concludes not to invest in securities because of
concerns that the market might decline further or for other reasons, the Fund
will realize a loss on the hedging instruments that is not offset by a reduction
in the price of the securities purchased.

Regulatory Aspects of Hedging Instruments. When using futures and options on
futures, the Fund is required to operate within certain guidelines and
restrictions with respect to the use of futures as established by the
Commodities Futures Trading Commission (the "CFTC"). In particular, the Fund is
exempted from registration with the CFTC as a "commodity pool operator" if the
Fund complies with the requirements of Rule 4.5 adopted by the CFTC. The Rule
does not limit the percentage of the Fund's assets that may be used for futures
margin and related options premiums for a bona fide hedging position. However,
under the Rule, the Fund must limit its aggregate initial futures margin and
related options premiums to not more than 5% of the Fund's net assets for
hedging strategies that are not considered bona fide hedging strategies under
the Rule. Under the Rule, the Fund also must use short futures and options on
futures solely for bona fide hedging purposes within the meaning and intent of
the applicable provisions of the Commodity Exchange Act.

Transactions in options by the Fund are subject to limitations established by
the option exchanges. The exchanges limit the maximum number of options that may
be written or held by a single investor or group of investors acting in concert.
Those limits apply regardless of whether the options were written or purchased
on the same or different exchanges or are held in one or more accounts or
through one or more different exchanges or through one or more brokers. Thus,
the number of options that the Fund can write or hold may be affected by options
written or held by other entities, including other investment companies having
the same adviser as the Fund (or an adviser that is an affiliate of the Fund's
adviser). The exchanges also impose position limits on futures transactions. An
exchange may order the liquidation of positions found to be in violation of
those limits and may impose certain other sanctions.

Under the Investment Company Act, when the Fund purchases a future, it must
maintain cash or readily marketable short-term debt instruments in an amount
equal to the market value of the securities underlying the future, less the
margin deposit applicable to it.

Tax Aspects of Certain Hedging Instruments. Certain foreign currency exchange
contracts in which the Fund can invest are treated as "Section 1256 contracts"
under the Internal Revenue Code. In general, gains or losses relating to Section
1256 contracts are characterized as 60% long-term and 40% short-term capital
gains or losses under the Code. However, foreign currency gains or losses
arising from Section 1256 contracts that are forward contracts generally are
treated as ordinary income or loss. In addition, Section 1256 contracts held by
the Fund at the end of each taxable year are "marked-to-market," and unrealized
gains or losses are treated as though they were realized. These contracts also
may be marked-to-market for purposes of determining the excise tax applicable to
investment company distributions and for other purposes under rules prescribed
pursuant to the Internal Revenue Code. An election can be made by the Fund to
exempt those transactions from this marked-to-market treatment.

Certain forward contracts the Fund enters into may result in "straddles" for
federal income tax purposes. The straddle rules may affect the character and
timing of gains (or losses) recognized by the Fund on straddle positions.
Generally, a loss sustained on the disposition of a position making up a
straddle is allowed only to the extent that the loss exceeds any unrecognized
gain in the offsetting positions making up the straddle. A previously disallowed
loss generally is allowed at the point when there is no unrecognized gain in the
offsetting positions making up the straddle or the offsetting position is
disposed of.

Under the Internal Revenue Code, the following gains or losses are treated as
ordinary income or loss: (1) gains or losses attributable to fluctuations in
exchange rates that occur between the time the Fund accrues interest or other
receivables or accrues expenses or other liabilities denominated in a foreign
currency and the time the Fund actually collects such receivables or pays such
liabilities, and (2) gains or losses attributable to fluctuations in the value
of a foreign currency between the date of acquisition of a debt security
denominated in a foreign currency or foreign currency forward contracts and the
date of disposition.

Currency gains and losses are offset against market gains and losses on each
trade before determining a net "Section 988" gain or loss under the Internal
Revenue Code for that trade, which may increase or decrease the amount of the
Fund's investment income available for distribution to its shareholders.

PORTFOLIO TRANSACTIONS

The Adviser is responsible for the placement of portfolio transactions, subject
to the supervision of the Board of Directors. Following is a summary of the
Adviser's trading policies which are described in Part II of its Form ADV. The
Adviser is a discretionary investment adviser. Accordingly, The Adviser
determines the securities and quantities to be bought and sold for each client's
account.

BEST EXECUTION

The Adviser follows procedures intended to provide reasonable assurance of best
execution. However, there can be no assurance that best execution will in fact
be achieved in any given transaction. Best execution can only be verified after
the fact. The Adviser seeks to place portfolio transactions with brokers or
dealers who will execute transactions as efficiently as possible and at the most
favorable net price. In placing executions and paying brokerage commissions or
dealer markups, the Adviser considers, among other factors, price, commission,
timing, aggregated trades, capable floor brokers or traders, competent block
trading coverage, ability to position, capital strength and stability, reliable
and accurate communication and settlement processing, use of automation,
knowledge of other buyers or sellers, arbitrage skills, administrative ability,
underwriting and provision of information on the particular security or market
in which the transaction is to occur, research, the range and quality of the
services made available to clients, and the payment of bona fide client
expenses. To the extent that Clients direct brokerage, the Adviser cannot be
responsible for achieving best execution. The applicability of specific criteria
will vary depending on the nature of the transaction, the market in which it is
executed and the extent to which it is possible to select from among multiple
broker-dealers.

CROSS TRADES

When the Adviser deems it to be advantageous, one fund may purchase securities
directly from another fund which is also managed by the Adviser. This may happen
due to a variety of circumstances, including situations when one fund must
purchase securities due to holding excess cash and, at the same time, a
different fund must sell securities in order to increase its cash position.
Cross trades are only executed when deemed beneficial to both funds. The Adviser
has adopted written procedures to ensure fairness to both funds.

INVESTMENT ALLOCATIONS

The Adviser considers many factors when allocating securities among clients,
including but not limited to the client's investment style, applicable
restrictions, availability of securities, available cash and other current
holdings. The Adviser employs several portfolio managers, each of whom performs
independent research and develops different levels of conviction concerning
potential investments. Clients managed by the portfolio manager performing the
research may receive priority allocations of limited investment opportunities
that are in short supply, including initial public offerings ("IPOs").

Clients are not assured of participating equally or at all in particular
investment allocations. The nature of a client's investment style may exclude it
from participating in many investment opportunities, even if the client is not
strictly precluded from participation based on written investment restrictions.
For example, (i) large cap equity clients are unlikely to participate in initial
public offerings of small-capitalization companies, (ii) the Adviser is likely
to allocate short-term trading opportunities to clients pursuing active trading
strategies rather than clients pursing long-term buy-and-hold strategies, and
(iii) private accounts generally do not participate in purchases of foreign
securities.

The Adviser attempts to allocate limited investment opportunities, including
IPOs, among clients in a manner that is fair and equitable when viewed over a
considerable period of time and involving many allocations. When the Adviser is
limited in the amount of a particular security it can purchase, due to a limited
supply, limited liquidity, or other reason, the Adviser may allocate the limited
investment opportunity to a subset of eligible clients. The Adviser would then
allocate the next limited investment opportunity to a different subset of
eligible clients, rotating among subsets as limited investment opportunities are
identified.

The Adviser serves as investment adviser for a number of clients and may deal
with conflicts of interest when allocating investment opportunities among its
various clients. For example, (i) the Adviser receives different advisory fees
from different clients, (ii) the performance records of some clients are more
public than the performance records of other clients; and (iii) the Adviser and
its affiliates, owners, officers and employees have invested substantial amounts
of their own capital in some client accounts (notably the Davis Funds and
Selected Funds), but do not invest their own capital in every client's account.
The majority of the Adviser' clients pursue specific investment strategies, many
of which are similar. The Adviser expects that, over long periods of time, most
clients pursuing similar investment strategies should experience similar, but
not identical, investment performance. Many factors affect investment
performance, including but not limited to: (i) the timing of cash deposits and
withdrawals to and from an account, (ii) the fact that the Adviser may not
purchase or sell a given security on behalf of all clients pursuing similar
strategies, (iii) price and timing differences when buying or selling
securities, and (iv) the clients' own different investment restrictions. The
Adviser' trading policies are designed to minimize possible conflicts of
interest in trading for its clients.

ORDER PRIORITY

The Adviser' trading desk prioritizes incoming orders of similar purchases and
sales of securities between institutional and managed accounts/wrap orders. The
Adviser's trading desk typically executes orders for institutional clients,
including investment companies, institutional private accounts, sub-advised
accounts and others. Managed account/wrap program sponsors typically execute
orders for managed account/wrap clients. The Adviser's trading desk attempts to
coordinate the timing of orders to prevent the Adviser from "bidding against
itself" on such orders.

PATTERN ACCOUNTS

The Adviser serves as investment adviser for a number of clients which are
patterned after model portfolios or designated mutual funds managed by the
Adviser. For example, a client pursuing Davis Large Cap Value investment
strategy may be patterned after Davis New York Venture Fund. The client
portfolio would be expected to own many, but not all, of the same portfolio
securities as Davis New York Venture Fund. Davis New York Venture Fund usually
owns more securities positions than the Adviser's typical Large Cap Value
client. New portfolio holdings are not usually added to a client account
pursuing a Large Cap Value strategy until the Adviser has enough confidence in
the holding to make it a significant holding in Davis New York Venture Fund. The
Adviser may not purchase or sell a given security on behalf of all clients (even
clients managed in a similar style), and it may not execute a purchase of
securities or a sale of securities for all participating clients at the same
time.

The Adviser generally attempts to aggregate trades for accounts that are
purchasing or selling the same security at approximately the same time. However,
at times the Adviser executes trades for patterned client accounts after the
trade has been executed for the designated mutual fund or the model portfolio
that the client account is patterned after. Since most of the Adviser'
transactions are in large capitalization exchange-traded equities, the Adviser
believes that this does not usually impact the long-term performance of these
clients.

Orders for accounts which are not patterned after model portfolios or designated
mutual funds are generally executed in the order received by the trading desk,
with the following exceptions: (i) the execution of orders for clients that have
directed that particular brokers be used may be delayed until the orders which
do not direct a particular broker have been filled; (ii) the execution of orders
may be delayed when the client (or responsible portfolio manager) requests such
delay due to market conditions in the security to be purchased or sold; and
(iii)the execution of orders which are to be bunched or aggregated.

AGGREGATED TRADES

The Adviser frequently follows the practice of aggregating orders of various
institutional clients for execution, if the Adviser believes that this will
result in the best net price and most favorable execution. In some instances,
aggregating trades could adversely affect a given client. However, the Adviser
believes that aggregating trades generally benefits clients because larger
orders tend to have lower execution costs, and

the Adviser clients do not compete with one another trading in the market.
Directed brokerage trades in a particular security are typically executed
separately from, and possibly after, the Adviser's other client trades.

In general, all the Adviser clients (excluding clients who are directing
brokerage and managed money/wrap accounts) seeking to purchase or sell a given
security at approximately the same time will be aggregated into a single order.
When that order is filled, all participating clients receive the price at which
the order was executed. If, at a later time, the participating clients wish to
purchase or sell additional shares of the same security, or if additional
clients seek to purchase or sell the same security, then the Adviser will issue
a new order and the clients participating in the new order will receive the
price at which the new order was executed.

In the event that an aggregated order is not entirely filled, the Adviser will
allocate the purchases or sales among participating clients in the manner it
considers to be most equitable and consistent with its fiduciary obligations to
all such clients. Generally, partially-filled orders are allocated pro rata
based on the initial order submitted by each participating client.

In accordance with the various managed account/wrap programs in which the
Adviser participates, the Adviser typically directs all trading to the
applicable program sponsor unless, in the Adviser's reasonable discretion, doing
so would adversely affect the client. Clients typically pay no commissions on
trades executed through program sponsors. In the event that an order to the
sponsor of a managed account/wrap program is not entirely filled, the Adviser
will allocate the purchases or sales among the clients of that sponsor in the
manner it considers to be most equitable and consistent with its fiduciary
obligations to all such clients. Generally, partially-filled orders are
allocated among the particular sponsor's participating clients on a random basis
that is anticipated to be equitable over time.

RESEARCH PAID FOR WITH COMMISSIONS, "SOFT DOLLARS"

The Adviser does not use client commission, "soft dollars", to pay for (i)
computer hardware or software, or other electronic communications facilities;
(ii) publications, both paper based or electronic that are available to the
general public; and (iii) third-party research services. If the Adviser
determines to purchase such services, it pays for them using its own resources.

The Adviser's portfolio managers may take into account the research resources,
as well as the execution capacity, of a brokerage firm in selecting brokers.
Thus, transactions may be directed to a brokerage firm which provides (i)
important information concerning a company, (ii) introductions to key company
officers, (iii) industry and company conferences, and (iv) other value added
research services.

The Adviser follows the concepts of Section 28(e) of the Securities Exchange Act
of 1934. Subject to the criteria of Section 28(e), the Adviser may pay a broker
a brokerage commission in excess of that which another broker might have charged
for effecting the same transactions, in recognition of the value of the
brokerage and research services provided by or through the broker. The Adviser
believes it is important to its investment decision-making to have access to
independent research.

EXCEPTIONS

There are occasions when the Adviser varies the trading procedures and
considerations described above. the Adviser exercises its best judgment in
determining whether clients should execute portfolio transactions simultaneously
with, prior to, or subsequent to the model portfolio or designated mutual fund
that they are patterned after. The factors that the Adviser considers in
exercising its judgment include, but are not limited to, the need for
confidentiality of the purchase or sale, market liquidity of the securities in
issue, the particular events or circumstances that prompt the purchase or sale
of the securities, and operational efficiencies. Even when transactions are
executed on the same day, clients may not receive the same prices as the model
portfolios or designated mutual funds they are patterned after. If the
transactions are not aggregated, such prices may be better or worse.

Portfolio Turnover. Because the Fund's portfolio is managed using the Davis
Investment Discipline, portfolio turnover is expected to be low. The Fund
anticipates that, during normal market conditions, its

annual portfolio turnover rate will be less than 100%. However, depending upon
market conditions, portfolio turnover rate will vary. At times it could be high,
which could require the payment of larger amounts in brokerage commissions and
more taxable distributions.

When the Adviser deems it to be appropriate, the Fund may engage in active and
frequent trading to achieve its investment objective. Active trading may include
participation in initial public offerings. Active trading may result in the
realization and distribution to shareholders of higher capital gains compared
with a fund with less active trading strategies, which would increase
shareholder tax liability. Frequent trading also increases transaction costs,
which could detract from the Fund's performance.

Portfolio Commissions

As of the date of this Statement of Additional Information the Fund had not yet
begun operations and had not yet paid any commissions.

INVESTMENT RESTRICTIONS

The Fund follows investment strategies developed in accordance with the
investment objective, policies and restrictions described in its prospectus and
this Statement of Additional Information.

The Fund has adopted the fundamental investment policies set forth below, which
may not be changed without a shareholder vote. Where necessary, an explanation
beneath a fundamental policy describes the Fund's practices with respect to that
policy, as allowed by current law. If the law governing a policy changes, the
Fund's practices may change accordingly without a shareholder vote.

The fundamental investment restrictions set forth below may not be changed
without the approval of the holders of the lesser of: (i) 67% of the eligible
votes, if the holders of more than 50% of the eligible votes are represented; or
(ii) more than 50% of the eligible votes.

Except for the fundamental investment policies regarding illiquid securities and
borrowing, all percentage restrictions apply as of the time of an investment
without regard to any later fluctuations in the value of portfolio securities or
other assets. All references to the assets of the Fund are in terms of current
market value.

(1) DIVERSIFICATION. The Fund is not required to diversify its investments.

Further Explanation of Diversification Policy. Davis Global Fund is classified
as a nondiversified fund under the 1940 Act and is allowed to focus its
investments in fewer companies than a diversified fund. Should the portfolio
managers determine that it is prudent to focus the Fund's portfolio in a few
companies, the portfolio may be subject to greater volatility and risk and the
Fund's investment performance, both good and bad, is expected to reflect the
economic performance of the few companies on which the Fund focuses.
Diversification is defined in section 5(b) of the 1940 Act based upon a
mathematical test that measures the degree of diversification of the portfolio.
The Fund intends to remain classified as a regulated investment company under
the Internal Revenue Code. This requires the Fund to conform to the following:
at the end of each quarter of the taxable year, at least 50% of the value of the
Fund's total assets must be represented by: cash and cash items, U.S. government
securities, securities of other regulated investment companies and "other
securities." For this purpose, "other securities" does not include investments
in the securities of any one issuer that represent more than 5% of the value of
the Fund's total assets or more than 10% of the issuer's outstanding voting
securities.

(2) CONCENTRATION. The Fund may not concentrate its investments in the
securities of issuers primarily engaged in any particular industry.

Further Explanation of Concentration Policy. The Fund may not invest 25% or more
of its total assets, taken at market value, in the securities of issuers
primarily engaged in any particular industry (other than securities issued or
guaranteed by the U.S. government or its agencies or instrumentalities). The
Fund generally uses BLP Equity Economic Sectors ("BLP Code") as published by
Bloomberg L.P. to determine industry classification. The Adviser may reclassify
a company if it believes that the BLP Code on a specific company does not
accurately describe the company.

(3) ISSUING SENIOR SECURITIES. The Fund may not issue senior securities, except
as permitted under applicable law, including the 1940 Act and published SEC
staff positions.

Further Explanation of Issuing Senior Securities. The Fund may not issue senior
securities nor sell short, except as provided by the 1940 Act and any rules,
regulations, orders or letters issued thereunder. This limitation does not apply
to selling short against the box. The 1940 Act defines a "Senior Security" as
any bond, debenture, note or similar obligation constituting a security and
evidencing indebtedness.

(4) BORROWING. The Fund may not borrow money, except to the extent permitted by
applicable law, including the 1940 Act and published SEC staff positions.

Further Explanation of Borrowing Policy. The Fund may borrow from banks provided
that, immediately thereafter the Fund has 300% asset coverage for all
borrowings. The Fund may purchase additional securities so long as borrowings do
not exceed 5% of its total assets. The Fund may obtain such short-term credit as
may be necessary for the clearance of purchases and sales of portfolio
securities. In the event that market fluctuations cause borrowing to exceed the
limits stated above, the Adviser would act to remedy the situation as promptly
as possible (normally within three business days), although it is not required
to dispose of portfolio holdings immediately if the Fund would suffer losses as
a result.

(5) UNDERWRITING. The Fund may not underwrite securities of other issuers
except to the extent permitted by applicable law, including the 1940 Act
and published SEC staff positions.

Further Explanation of Underwriting Policy. The Fund may not underwrite
securities of other issuers, except insofar as the Fund may be deemed to be an
underwriter in connection with the disposition of its portfolio securities.

(6) INVESTMENTS IN COMMODITIES AND REAL ESTATE. The Fund may not purchase or
sell commodities or real estate, except to the extent permitted by
applicable law, including the 1940 Act and published SEC staff positions.

Further Explanation of Policy Restricting Investments in Commodities and Real
Estate. The Fund may purchase or sell financial futures contracts, options on
financial futures contracts, currency contracts and options on currency
contracts as described in its prospectus and Statement of Additional
Information. The Fund may not purchase or sell real estate, except that the Fund
may invest in securities that are directly or indirectly secured by real estate
or issued by issuers that invest in real estate.

(7) MAKING LOANS. The Fund may not make loans to other persons, except as
allowed by applicable law, including the 1940 Act and published SEC staff
positions.

Further Explanation of Lending Policy. The acquisition of investment securities
or other investment instruments, entering into repurchase agreements, leaving
cash on deposit with the Fund's custodian, and similar actions are not deemed to
be the making of a loan.

To generate income and offset expenses, the Fund may lend portfolio securities
to broker-dealers and other financial institutions that the Adviser believes to
be creditworthy in an amount up to 33 1/3% of its total assets, taken at market
value. While securities are on loan, the borrower will pay the Fund any income
accruing on the security. The Fund may invest any collateral it receives in
additional portfolio securities, such as U.S. Treasury notes, certificates of
deposit, other high-grade, short-term obligations or interest-

bearing cash equivalents. The Fund is subject to gains or losses due to changes
in the market value of securities that it has lent.

When the Fund lends its securities, it will require the borrower to give the
Fund collateral in cash or government securities. The Fund will require
collateral in an amount equal to at least 100% of the current market value of
the securities lent, including accrued interest. The Fund has the right to call
a loan and obtain the securities lent any time on notice of not more than five
business days. The Fund may pay reasonable fees in connection with such loans.

NON-FUNDAMENTAL RESTRICTIONS

In addition to the foregoing restrictions, the Fund has adopted the following
non-fundamental policies that may be changed without shareholder approval:

1. Illiquid Securities. The Fund may not purchase illiquid securities if more
than 15% of the value of the Fund's net assets would be invested in such
securities.

2. High-Yield, High-Risk Securities. The Fund will not purchase debt
securities rated BB or Ba or lower if the securities are in default at the
time of purchase or if such purchase would then cause more than 35% of the
Fund's net assets to be invested in such lower-rated securities.

3. Options. The Fund will not purchase an option if the purchase would cause
the total premiums (at market) of all options then owned to exceed 5% of
the Fund's total assets. The Fund will not sell covered calls if the
transaction would cause the total premiums (at market) of all covered calls
then written to exceed 25% of the Fund's total assets. For additional
information concerning option strategies and their risks, see the section
entitled "Derivatives".

4. Futures Contracts. The Fund will not engage in a futures transaction if the
transaction would cause the nominal value of futures contracts then
purchased or sold to exceed 25% of the Fund's total assets. For additional
information concerning futures contracts and their risks, see the section
entitled "Derivatives".

5. Borrowing. The Fund will not borrow in excess of 35% of net assets. The
Board of Directors will be notified in the event borrowings exceed 10% of
the Fund's total assets.

6. Short Selling. The Fund will not sell any security short if it would cause
more than 5% of its total assets, taken at market value, to be sold short.
This limitation does not apply to selling short against the box.

7. Investing For Control. The Fund does not invest for the purpose of
exercising control or management of other companies.

SECTION II: KEY PERSONS

This Statement of Additional Information should be read in conjunction with the
prospectus. This Statement of Additional Information supplements the information
available in the prospectus.

ORGANIZATION OF THE FUND

DAVIS NEW YORK VENTURE FUND, INC. Davis New York Venture Fund, Inc. is an
open-end management investment company incorporated in Maryland in 1968 and
registered under the 1940 Act. Davis New York Venture Fund, Inc., is a series
investment company that may issue multiple series, each of which would represent
an interest in its separate portfolio. Davis New York Venture Fund, Inc.
currently offers three series: Davis New York Venture Fund which is classified
under the 1940 Act as a diversified company, and Davis Research Fund and Davis
Global Fund which are classified under the 1940 act as a non-diversified
companies. Currently, only the directors, officers and employees of the Davis
Funds or their investment adviser and sub-adviser (and affiliated companies) are
eligible to purchase shares of Davis Research Fund or Davis Global Fund. Davis
New York Venture Fund is available for public investment and its shares are
offered through separate prospectuses and a Statement of Additional Information
that may be obtained by calling Davis Funds Shareholder Services at
1-800-279-0279. The Board of Directors may increase the number of Davis Funds in
the future and may, at any time, discontinue offering shares of any Fund to the
public.

FUND SHARES. The Fund may issue shares in different classes. The Fund's shares
currently are divided into four classes of shares: A, B, C, and Y. The Board of
Directors may offer additional series or classes in the future and may at any
time discontinue the offering of any series or class of shares. Each share, when
issued and paid for in accordance with the terms of the offering, is fully paid
and non-assessable. Shares have no preemptive or subscription rights and are
freely transferable. The Fund's shares represent an interest in the assets of
the Fund issuing the share and have identical voting, dividend, liquidation and
other rights and the same terms and conditions as any other shares except that:
(i) each dollar of net asset value per share is entitled to one vote; (ii) the
expenses related to a particular class, such as those related to the
distribution of each class and the transfer agency expenses of each class are
borne solely by each such class; (iii) each class of shares votes separately
with respect to provisions of the Rule 12b-1 Distribution Plan that pertain to a
particular class; and (iv) other matters for which separate class voting is
appropriate under applicable law. Each fractional share has the same rights, in
proportion, as a full share. Due to the differing expenses of the classes,
dividends are likely to be lower for Class B and C shares than for Class A
shares and are likely to be higher for Class Y shares than for any other class
of shares.

For some issues, such as the election of directors, all of Davis New York
Venture Fund, Inc.'s authorized series vote together. For other issues, such as
approval of the advisory agreement, each authorized series votes separately.
Shares do not have cumulative voting rights; therefore, the holders of more than
50% of the voting power can elect all of the directors. Rule 18f-2 under the
1940 Act provides that any matter required to be submitted under the provisions
of the 1940 Act or applicable state law or otherwise to the shareholders of the
outstanding voting securities of an investment company will not be deemed to
have been effectively acted on unless approved by the holders of a majority of
the outstanding shares of each series affected by such matter. Rule 18f-2
further provides that a series shall be deemed to be affected by a matter unless
it is clear that the interests of each series in the matter are identical or
that the matter does not affect any interest of such series. Rule 18f-2 exempts
the selection of independent accountants and the election of Board members from
the separate voting requirements of the Rule.

In accordance with Maryland law and the Fund's bylaws, the Fund does not hold
regular annual shareholder meetings. Shareholder meetings are held when they are
required under the 1940 Act or when otherwise called for special purposes.
Special shareholder meetings may be called on the written request of
shareholders of at least 25% of the voting power that could be cast at the
meeting. The Fund will provide assistance in calling and holding such special
meeting to the extent required by Maryland statutes or SEC rules and regulations
then in effect.

DIRECTORS AND OFFICERS

Each of the directors and officers holds identical offices with each of the
Davis Funds (three registrants, a total of 11 separate series): Davis New York
Venture Fund, Inc., Davis Series, Inc., and Davis Variable Account Fund, Inc. As
indicated below, certain directors and officers also may hold similar positions
with Selected American Shares, Inc., Selected Special Shares, Inc., and Selected
Capital Preservation Trust (collectively the "Selected Funds"), mutual funds
that are managed by the Adviser.

The Board of Directors supervises the business and management of the Davis
Funds. The Board approves all significant agreements between the Davis Funds and
those companies that furnish services to the Davis Funds. The names and
addresses of the directors and officers are set forth below, together with their
principal business affiliations and occupations for the last five years.

DIRECTORS

For the purposes of their service as directors to the Davis Funds, the business
address for each of the directors is: 2949 E. Elvira Road, Suite 101, Tucson, AZ
85706. Each director serves until his or her retirement, resignation, death or
removal. Directors must retire at the close of business on the last day of the
calendar year in which the director attains age seventy-two (72), except that
any person who was a director on July 1, 1994, and at that date was
seventy-three (73) years of age or less, shall retire from the Board of
Directors and cease being a director at the close of business on the last day of
the year in which the director attains age seventy-four (74).

TERM OF NO. OF PORTFOLIOS
POSITION(S) OFFICE AND IN FUND COMPLEX
NAME HELD WITH LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN
(birth date) FUNDS TIME SERVED DURING PAST FIVE YEARS BY DIRECTOR
---------------------------- -- -------------- -- -------------- -- ------------------------------ -- --------------------

INDEPENDENT DIRECTORS:

WESLEY E. BASS JR. Director Since 1990 President of Bass & 12
(8/21/31) Associates (financial
consulting); formerly First
Deputy City Treasurer, City
of Chicago; and Executive
Vice President, Chicago
Title and Trust Company
(bank and trust).

OTHER DIRECTORSHIPS: None

---------------------------- -- -------------- -- -------------- -- ------------------------------ -- --------------------

MARC P. BLUM Director Since 1986 Chief Executive Officer, 12
(9/9/42) World Total Return Fund,
LLLP; Of Counsel to Gordon,
Feinblatt, Rothman,
Hoffberger and Hollander,
LLC (law firm).

OTHER DIRECTORSHIPS: Director, Legg Mason Trust (asset management company) and
Rodney Trust Company (Delaware); Former Director, Mid-Atlantic Realty Trust
(real estate investment trust), Trustee, College of Notre Dame of Maryland,
McDonogh School and other public charities, private foundations and businesses.

THOMAS GAYNER Director Since 2004 Chief Investment Officer, 12
(12/16/61) Markel Corporation (Markel
Corporation Markets and
underwrites specialty
insurance products).
OTHER DIRECTORSHIPS:
Markel Corporation.

JERRY D. GEIST Director Since 1986 Chairman, Santa Fe Center 12
(5/23/34) Enterprises (energy project
development); retired
Chairman and President,
Public Service Company of
New Mexico.

OTHER DIRECTORSHIPS: Director, CH2M Hill, Inc. (engineering); Chairman, Santa Fe
Center Enterprises, Member, Investment Committee for Microgeneration Technology
Fund, UTECH Funds.

---------------------------- -- -------------- -- -------------- -- ------------------------------ -- --------------------

D. JAMES GUZY Director Since 1982 Chairman, PLX Technology, 12
(3/7/36) Inc. (semi-conductor
manufacturer).

OTHER DIRECTORSHIPS: Director, Intel Corp. (semi-conductor manufacturer), Cirrus Logic Corp. (semi-conductor
manufacturer), Alliance Technology Fund (a mutual fund), Micro Component Technology, Inc. (micro-circuit handling and
testing equipment manufacturer), LogicVision, Inc. (semi-conductor software company) and Tessera Technologies, Inc.
(semi-conductor packaging company); Former Director, Novellus Systems, Inc. (semi-conductor manufacturer).

---------------------------- -- -------------- -- -------------- -- ------------------------------ -- --------------------

G. BERNARD HAMILTON Director Since 1978 Managing General Partner, 12
(3/18/37) Avanti Partners, L.P.
(investment partnership).

OTHER DIRECTORSHIPS: None

--------------------------------------------------------------------------------------------------------------------------

ROBERT P. MORGENTHAU Director Since 2002 Chairman, Northroad Capital 12
(3/22/57) Management, LLC (an
investment management firm)
since June 2002; President
of Private Advisory Services
of Bank of America (an
investment management firm)
from 2001 until 2002; prior
to that a managing director
and global head of marketing
and distribution for Lazard
Asset Management (an
investment management firm)
for ten years.

OTHER DIRECTORSHIPS: None

---------------------------- -- -------------- -- -------------- -- ------------------------------ -- --------------------

THEODORE B. SMITH, JR. Director Davis Funds Chairman of John Hassall, 12
(12/23/32) director Inc. (fastener
since 1994 manufacturing); Chairman of
Cantrock Realty.

OTHER DIRECTORSHIPS: Mayor of the Incorporated Village of Mill Neck.

---------------------------- -- -------------- -- -------------- -- ------------------------------ -- --------------------

CHRISTIAN R. SONNE Director Since 1990 General Partner of Tuxedo 12
(5/6/36) Park Associates (land
holding and development
firm); President and Chief
Executive Officer of Mulford
Securities Corporation
(private investment fund)
until 1990; formerly Vice
President of Goldman Sachs &
Co. (investment banking).

OTHER DIRECTORSHIPS: None

--------------------------------------------------------------------------------------------------------------------------

MARSHA WILLIAMS Director Since 1999 Chief Financial Officer of 15
(3/28/51) Equity Office Properties
Trust (a real estate
investment trust); former
Chief Administrative Officer
of Crate & Barrel (home
furnishings retailer);
former Vice President and
Treasurer, Amoco Corporation
(oil & gas company).

OTHER DIRECTORSHIPS: Director of the Selected Funds (consisting of 3 portfolios)
director since 1996; Director, Modine Manufacturing, Inc.(heat transfer
technology); Chicago Bridge & Iron Company, N.V. (industrial construction and
engineering).

----------------------------- - ------------- -- --------------- -- ---------------------------- -- --------------------

INSIDE DIRECTORS*:

JEREMY H. BIGGS Director/ Since 1995 Vice Chairman of Fiduciary 12
(8/16/35) Chairman Trust Company International
(money management firm);
member of the Investment
Policy Committee, and member
of the International
Investment Committee;
Consultant to Davis Selected
Advisers, L.P.

OTHER DIRECTORSHIPS: Former Director (resigned October 2003) of the Van
Eck/Chubb Funds six portfolios (mutual fund).

---------------------------- -- -------------- -- -------------- -- ------------------------------ -- --------------------

ANDREW A. DAVIS (6/25/63) Director Director President or Vice President 15
since 1997; of each Davis Fund and
Davis Funds Selected Fund; President,
officer Davis Selected Advisers,
since 1997. L.P., and also serves as an
executive officer in certain
companies affiliated with
the Adviser.

OTHER DIRECTORSHIPS: Director of the Selected Funds (consisting of 3 portfolios)
since 1998.
---------------------------------------------------------------------------------------------------------------------------

CHRISTOPHER C. DAVIS Director of Davis Funds Chief Executive Officer, 15
(7/13/65) all Funds. director President or Vice President
since 1997; of each Davis Fund and
Davis Funds Selected Fund; Chairman and
officer Chief Executive Officer,
since 1997. Davis Selected Advisers,
L.P., and also serves as an
executive officer in certain
companies affiliated with
the Adviser, including sole
member of the Adviser's
general partner, Davis
Investments, LLC; Employee
of Shelby Cullom Davis & Co.
(registered broker/dealer).

OTHER DIRECTORSHIPS: Director of the Selected Funds (consisting of 3 portfolios)
since 1998.

----------------------------- -- ------------- --- -------------- -- ----------------------------- -- --------------------

* Jeremy H. Biggs, Andrew A. Davis and Christopher C. Davis own partnership
units (directly, indirectly or both) of the Adviser and are considered to be
"interested persons" of the Funds as defined in the Investment Company Act of
1940. Andrew A. Davis and Christopher C. Davis are brothers.

INDEPENDENT DIRECTORS' COMPENSATION

During the fiscal year ended July 31, 2004, the compensation paid to the
directors who are not considered to be interested persons of the Fund was as
follows:

------------------------- ---------------------- ---------------------------
NAME AGGREGATE FUND TOTAL COMPLEX
COMPENSATION(1) COMPENSATION(2)
------------------------- ---------------------- ---------------------------
Wesley E. Bass $32,300 $60,030
Marc P. Blum 38,000 70,500
Thomas Gayner 21,200 39,500
Jerry D. Geist 38,000 70,500
D. James Guzy 38,000 70,500
G. Bernard Hamilton 38,000 70,500
Robert P. Morgenthau 38,200 70,500
Theodore B. Smith, Jr. 38,000 70,500
Christian R. Sonne 38,000 70,500
Marsha Williams 40,400 113,488
----------------------------------------------------------------------------

(1) "Aggregate Fund compensation" is the aggregate compensation paid for service
as a director by all both series of Davis New York Venture Fund, Inc. Davis
New York Venture Fund and Davis Research Fund, Davis Global Fund was not
yet in operation. Independent Directors fees will be allocated between the
three funds in proportion to their net assets. The fees to be received from
Davis Global Fund in its first year of operations are estimated to be less
than $50 dollars.

(2) "Total complex compensation" is the aggregate compensation paid for service
as a director by all mutual funds with the same investment adviser. There
are six registered investment companies in the complex.

(3) Thomas Gayner first became a director on January 1, 2004.

OFFICERS

All Davis Funds officers (including some Inside Directors) hold positions as
executive officers with the Adviser and its affiliates, including Davis Selected
Advisers, L.P. (the Adviser), Davis Selected Advisers - NY, Inc. (a
sub-adviser), Davis Distributors, LLC (the principal underwriter), Davis
Investments, LLC (the sole general partner of the Adviser), Venture Advisers,
Inc. (a company holding some of the Adviser's limited partnership units). The
Davis Funds do not pay salaries to any of their officers. Each of the Davis
Funds' officers serves for one year and until his or her successor is chosen and
qualifies.

CHRISTOPHER C. DAVIS (BORN 7/13/65, DAVIS FUNDS OFFICER SINCE 1997). See
description in the section on Inside Directors.

ANDREW A. DAVIS (BORN 6/25/63, DAVIS FUNDS OFFICER SINCE 1997). See description
in the section on Inside Directors.

KENNETH C. EICH (BORN 8/14/53, DAVIS FUNDS OFFICER SINCE 1997). Executive Vice
President and Principal Executive Officer of each of the Davis Funds (consisting
of 12 portfolios) and Selected Funds (consisting of three portfolios); Chief
Operating Officer, Davis Selected Advisers, L.P.; and also serves as an
executive officer in certain companies affiliated with the Adviser; Member,
Board of Governors-Investment Company Institute.

DOUGLAS A. HAINES, CPA, (BORN 3/4/71, DAVIS FUNDS OFFICER SINCE 2004). Vice
President, Treasurer, Chief Financial Officer, Principal Financial Officer, and
Principal Accounting Officer of each of the Davis Funds (consisting of 12
portfolios) and Selected Funds (consisting of three portfolios).

SHARRA L. REED (BORN 9/25/66, DAVIS FUNDS OFFICER SINCE 1997). Vice President,
Chief Compliance Officer of the Davis Funds (consisting of 12 portfolios) and
Selected Funds (consisting of three portfolios); Vice President Davis Selected
Advisers, L.P.; and also serves as an executive officer in certain companies
affiliated with the Adviser.

THOMAS D. TAYS, CPA, CFA, (BORN 3/7/57, DAVIS FUNDS OFFICER SINCE 1997). Vice
President and Secretary of each of the Davis Funds (consisting of 12 portfolios)
and Selected Funds (consisting of three portfolios); Vice President, Chief Legal
Officer and Secretary, Davis Selected Advisers, L.P.; and also serves as an
executive officer in certain companies affiliated with the Adviser.

ARTHUR DON (BORN 9/24/53, DAVIS FUNDS OFFICER SINCE 1991). Assistant Secretary
(for clerical purposes only) of each of the Davis Funds and Selected Funds;
Partner, Seyfarth Shaw, LLP (a law firm); counsel to the Independent Directors
and the Davis Funds.

STANDING COMMITTEES OF THE BOARD OF DIRECTORS

AUDIT COMMITTEE. The Davis Funds have an Audit Committee, which is comprised
entirely of Independent Directors (Marsha Williams, Chairperson; Wesley E. Bass,
Jr.; D. James Guzy; Robert Morgenthau; and Christian R. Sonne). The Audit
Committee reviews financial statements and other audit-related matters for the
Davis Funds. The Audit Committee also holds discussions with management and with
the Independent Accountants concerning the scope of the audit and the auditor's
independence. The Audit Committee meets as often as deemed appropriate by the
Audit Committee. The Audit Committee met four times during calendar year 2004.

The Board of Directors has determined that Marsha Williams is an independent
Audit Committee Financial Expert pursuant to Section 407 of the Sarbanes-Oxley
Act and as defined by Item 3 of Form N-CSR of the Investment Company Act of
1940. In their deliberations the Board of Directors considered Ms. Williams' (i)
professional experience, (ii) independence as defined in Item 3 of Form N-CSR,
and (iii) integrity and absence of disciplinary history.

NOMINATING COMMITTEE. The Davis Funds have a Nominating Committee, which is
comprised entirely of Independent Directors (Jerry D. Geist, Chairperson; Marc
P. Blum; D. James Guzy; G. Bernard Hamilton; and Christian R. Sonne), which
meets as often as deemed appropriate by the Nominating Committee. The Funds do
not elect Directors annually. Each Director serves until his or her retirement,
resignation, death or removal. Directors must retire at the close of business on
the last day of the calendar year in which the Director attains age seventy-two
(72), except that any person who was a director on July 1, 1994, and at that
date was seventy-three (73) years of age or less, shall retire from the Board of
Directors and cease being a director at the close of business on the last day of
the year in which the director attains age seventy-four (74). The Nominating
Committee met four times during calendar year 2004. The Nominating Committee
reviews and nominates persons to serve as members of the Board of Directors, and
reviews and makes recommendations concerning the compensation of the Independent
Directors. The chairperson of the Nominating Committee also serves as the Lead
Independent Director. The Nominating Committee does not have a charter. When the
board of directors is seeking a candidate to become a Director, qualified
candidates will be men or women of proven character and talent who have achieved
notable success in their professional careers. The specific talents which the
Nominating Committee seeks in a candidate depends upon the board of directors'
needs at the time a vacancy occurs. When the board of directors is seeking a
candidate to become a director, it considers qualified candidates received from
a variety of sources, including having authority to retain third parties that
may receive compensation related to identifying and evaluating candidates.
Shareholders may propose nominees by writing to the Nominating Committee, in
care of the Secretary of the Davis Funds, at 2949 East Elvira, Suite 101,
Tucson, Arizona 85706.

BROKERAGE COMMITTEE. The Davis Funds have a Brokerage Committee, which is
comprised entirely of Independent Directors (D. James Guzy, Co-Chairperson; and
G. Bernard Hamilton, Co-Chairperson), which meets as often as deemed appropriate
by the Brokerage Committee. The Brokerage Committee met once during calendar
year 2004. The Brokerage Committee reviews and makes recommendations concerning
Davis Funds portfolio brokerage and trading practices.

PRICING COMMITTEE. The Davis Funds have a Pricing Committee (Marc P. Blum,
Chairperson; Kenneth C. Eich; and Douglas A. Haines) that meets as often as
deemed appropriate by the Pricing Committee. The Pricing Committee met more than
50 times during calendar year 2004 The Pricing Committee reviews and makes
recommendations concerning pricing of the Fund's portfolio securities.

DIRECTORS' FUND HOLDINGS

As of December 31, 2003, the Directors had invested the following amounts in all
Funds managed by the Adviser. Investments are listed in the following ranges:
none, $1-10,000, $10,001-50,000, $50,001-100,000 and over $100,000:

------------------------------- ----------------------- -----------------------
NAME DAVIS GLOBAL FUND^ TOTAL INVESTED
IN ALL FUNDS*
------------------------------- ----------------------- -----------------------

INDEPENDENT DIRECTORS:
Wesley E. Bass None over $100,000
Marc P. Blum o None over $100,000
Thomas Gayner None $1-10,000
Jerry D. Geist None over $100,000
D. James Guzy None over $100,000
G. Bernard Hamilton None over $100,000
Robert P. Morgenthau None over $100,000
Theodore B. Smith, Jr. None over $100,000
Christian R. Sonne None over $100,000
Marsha Williams None over $100,000

INSIDE DIRECTORS:
Jeremy H. Biggs None over $100,000
Andrew A. Davis** None over $100,000
Christopher C. Davis** None over $100,000
------------------------------- ----------------------- -----------------------

^ Davis Global Fund began operations on December 22, 2004. No party had
invested in the Fund as of December 31, 2003.

* Total Invested in All Funds is the aggregate dollar range of investments in
all Funds overseen by the individual director and managed by Davis Selected
Advisers, L.P. This includes the Davis Funds for all directors and also the
Selected Funds for Andrew Davis, Christopher Davis and Marsha Williams.

** Andrew A. Davis and Christopher C. Davis are employed by the Adviser and
are considered to be "interested persons" of the Funds as defined in the
Investment Company Act of 1940.

INDEPENDENT DIRECTORS' AFFILIATIONS AND TRANSACTIONS

None of the Independent Directors (or their immediate family members) owns any
securities issued by the Davis Funds' investment adviser, sub-adviser, principal
underwriter or any company (other than a registered investment company) directly
or indirectly controlling, controlled by or under common control with the above
listed companies (hereafter referred to as the "Adviser and its affiliates").
Jeremy H. Biggs, Andrew A. Davis and Christopher C. Davis own partnership units
(directly, indirectly or both) in the Adviser and are considered Inside
Directors.

None of the Independent Directors (or their immediate family members) have had
any direct or indirect interest, the value of which exceeds $60,000, during the
last two calendar years in the Adviser and its affiliates.

None of the Independent Directors (or their immediate family members) have had
any material interest in any transaction, or series of transactions, during the
last two years, in which the amount involved exceeds

$60,000 and to which any of the following persons was a party: any Davis Fund,
an officer of the Davis Funds, or any fund managed by the Adviser or the Adviser
and its affiliates.

None of the Independent Directors (or their immediate family members) have had
any direct or indirect relationships during the last two years, in which the
amount involved exceeds $60,000 and to which any of the following persons was a
party: any Davis Fund, an officer of the Davis Funds, or any fund managed by the
Adviser, or the Adviser and its affiliates.

None of the officers of the Adviser and its affiliates have served during the
last two years on the board of directors of a company where an Independent
Director (or their immediate family members) served as an officer.

CERTAIN SHAREHOLDERS OF THE FUND

As of the effective date of this Statement of Additional Information, the Fund's
only shareholders were Shelby Cullom Davis & Co., and persons affiliated with
the Fund's advisers, Davis Selected Advisers, L.P.

INVESTMENT ADVISORY SERVICES

DAVIS SELECTED ADVISERS, L.P. AND DAVIS SELECTED ADVISERS-NY, INC. Davis
Selected Advisers, L.P. (the "Adviser"), whose principal office is at 2949 East
Elvira Road, Suite 101, Tucson, Arizona 85706, serves as investment adviser for
Davis New York Venture Fund, Inc., Davis Series, Inc., Davis Variable Account
Fund, Inc. (collectively the "Davis Funds"), Selected American Shares, Inc.,
Selected Special Shares, Inc., and Selected Capital Preservation Trust
(collectively the "Selected Funds"). The Adviser also provides advisory or
sub-advisory services to other parties including other registered investment
companies, private accounts, offshore funds, and managed money/wrap accounts.
Davis Investments, LLC, an entity controlled by Christopher C. Davis is the
Adviser's sole general partner. Christopher C. Davis is Chief Executive Officer
of the Adviser and, as the sole member of the general partner, controls the
Adviser. Davis Distributors, LLC (the "Distributor"), a subsidiary of the
Adviser, serves as the distributor or principal underwriter of the funds that
the Adviser administers, including Davis Funds, Selected Funds, and offshore
funds. Davis Selected Advisers - NY, Inc., ("Sub-Adviser") a wholly owned
subsidiary of the Adviser, performs investment management, research and other
services for the Davis Funds on behalf of the Adviser under sub-advisory
agreements with the Adviser.

ADVISORY AGREEMENT WITH DAVIS SELECTED ADVISERS, L.P. AND SUB-ADVISORY AGREEMENT
WITH DAVIS SELECTED ADVISERS-NY, INC. Pursuant to an advisory agreement, Davis
Global Fund pays the Adviser a fee at an annual rate based on average net
assets, 0.75% on the first $250 million; 0.65% on the next $250 million; 0.55%
on total net assets more than $500 million.

These fees may be higher than those of most other mutual funds but are not
necessarily higher than those paid by funds with similar objectives. Advisory
fees are allocated among each Class of shares in proportion to each Class's
relative total net assets. Davis Global Fund began operations on December 22,
2004, and as of that date had not yet paid any advisory fees.

In accordance with the provisions of the 1940 Act, the Advisory Agreement and
Sub-Advisory Agreement will terminate automatically on assignment and are
subject to cancellation on 60 days' written notice by the Board of Directors,
the vote of the holders of a majority of the Fund's outstanding shares or the
Adviser. The continuance of the Advisory Agreement and Sub-Advisory Agreement
must be approved at least annually by the Fund's Board of Directors or by the
vote of holders of a majority of the outstanding shares of the Fund. In
addition, any new agreement, or the continuation of the existing agreement, must
be approved by a majority of Directors who are not parties to the agreements or
interested persons of any such party. The Advisory Agreement also makes
provisions for portfolio transactions and brokerage policies of the Fund, which
are discussed above under "Portfolio Transactions."

The Adviser has entered into a Sub-Advisory Agreement with its wholly owned
subsidiary, Davis Selected Advisers - NY, Inc, where the Sub-Adviser performs
research and other services on behalf of the Adviser.

Under the Agreement, the Adviser pays all of the Sub-Adviser's direct and
indirect costs of operation. All of the fees paid to the Sub-Adviser are paid by
the Adviser and not the Fund.

Pursuant to the Advisory Agreement, the Adviser, subject to the general
supervision of the Fund's Board of Directors, provides management and investment
advice and furnishes statistical, executive and clerical personnel, bookkeeping,
office space and equipment necessary to carry out its investment advisory
functions and such corporate managerial duties as requested by the Board of
Directors of the Fund. The Fund bears all expenses other than those specifically
assumed by the Adviser under the Advisory Agreement, including preparation of
its tax returns, financial reports to regulatory authorities, dividend
determinations, transaction and accounting matters related to its custodian
bank, transfer agency, custodial and shareholder services, and qualification of
its shares under federal and state securities laws. The Fund reimburses the
Adviser for providing certain services, including accounting & administrative
services, and shareholder services. Davis Global Fund began operations on
December 22, 2004, and as of that date had not yet reimbursed the Adviser for
any fees.

APPROVAL OF THE ADVISORY AND SUB-ADVISORY AGREEMENTS. The Board of Directors is
scheduled to meet four times a year. The directors, including the Independent
Directors, believe that matters bearing on the Advisory and Sub-Advisory
Agreements are considered at most, if not all, of their meetings. The
Independent Directors are advised by independent legal counsel selected by the
Independent Directors.

In March 2004 the directors, including a majority of the Independent Directors,
approved the continuation of existing advisory and sub-advisory agreements for
each of the Davis Funds with one material change, additional breakpoints were
added to the fee schedule for Davis New York Venture Fund.

In preparation for this review the Independent Directors submitted a set of
questions to the Adviser and Sub-Adviser specifically relating to renewal of the
agreements. The Independent Directors met with representatives of the Adviser
and Sub-Adviser, and with counsel for the Independent Directors, and reviewed
the answers and supporting exhibits. The Directors reviewed and considered a
number of factors in recommending renewal of the exiting agreements, including:

(i) the investment performance of the each Fund. Results were compared
against both a peer group of funds and an appropriate index. The
Directors focused on long-term performance, noting that the equity
funds generally performed well measured against both their peers and
the indexes. The performance of the government bond fund lags both its
peer group and its index. The government bond fund is provided as a
service for investors investing in the Davis Funds wishing to exchange
out of equity funds but wanting to avoid paying a second sales charge.
The money market fund's performance was comparable to its peers;
(ii) sales and redemptions of each Fund;
(iii) the expenses of each Fund compared against a peer group of funds. The
Directors noted that total expenses were generally on par with their
peers; and
(iv) the Adviser's and Sub-Adviser's operations, financial condition, and
profitability.

Based on their review, the Directors, including a majority of the Independent
Directors, concluded that the advisory fees and other expenses of each of the
Davis Funds are fair, both absolutely and in comparison with those of other
funds in the industry, and that shareholders have received reasonable value in
return for paying such fees and expenses.

In September 2004 the directors, including a majority of the Independent
Directors, approved the advisory and sub-advisory agreements for Davis Global
Fund. The directors considered (i) advisory fees paid to other Davis Funds, (ii)
advisory fees paid to other world stock funds, (iii) currently, only the
directors, officers and employees of the Fund or its investment adviser and
sub-adviser (and the investment adviser itself and affiliated companies) are
eligible to purchase Fund shares; and (iv) the directors will review all Davis
Funds advisory and sub-advisory agreements again in March 2005; and concluded
that the proposed fee schedule was reasonable.

The Directors, including the Independent Directors, regularly review, among
other issues: (i) arrangements in respect of the distribution of Davis Funds'
shares; (ii) the allocation of Davis Funds' brokerage, including allocations to
brokers affiliated with the Adviser and the use of "soft" commission dollars to
pay Fund expenses and to pay for certain research and other similar services;
(iii) the Adviser's management of the relationships with the Davis Funds' third
party providers, including custodian and transfer agents; (iv) the resources
devoted to and the record of compliance with the Davis Funds' investment
policies and restrictions and with policies on personal securities transactions;
and (v) the nature, cost and character of non-investment management services
provided by the Adviser and its affiliates.

UNIQUE NATURE OF EACH FUND. The Adviser may serve as the investment adviser or
sub-adviser to other funds that have investment objectives and principal
investment strategies similar to those of the Davis Funds. While the Davis Funds
may have many similarities to these other funds, the investment performance of
each fund will be different due to a number of differences between the funds,
including differences in sales charges, expense ratios and cash flows.

CODE OF ETHICS. The Adviser, Sub-Adviser, Distributor and the Davis Funds have
adopted Codes of Ethics meeting the requirements of Rule 17j-1 that regulate the
personal securities transactions of the Adviser's investment personnel, other
employees and affiliates with access to information regarding securities
transactions of the Davis Funds. Such employees may invest in securities,
including securities that may be purchased or held by the Davis Funds. A copy of
the Code of Ethics is on public file with, and available from, the Securities
and Exchange Commission.

LITIGATION MATTERS. On June 2, 2004, a proposed class action lawsuit was filed
in the United States District Court for the Southern District of New York on
behalf of investors in certain mutual funds ("Funds") managed by Davis Selected
Advisers L.P. ("Davis Advisors") including the Davis Funds. The plaintiffs claim
that Davis Advisors and its affiliates, and the individual directors of the
Funds (collectively the "Defendants") used Fund assets to pay brokers to market
the Funds and that the Defendants disguised such payments as brokerage
commissions and further failed to disclose such payments in public filings or
elsewhere. The lawsuit seeks damages of unspecified amounts. Three substantially
identical proposed class action lawsuits were filed against the Defendants later
in June and July 2004 in the United States Court for the Southern District of
New York. Davis Advisors believes the actions are without merit and the
Defendants intend to vigorously defend the proceedings.

PORTFOLIO MANAGERS. The Portfolio Managers of the Fund are Christopher Davis,
Jae Chung, Tania Pouschine, Danton Goei, Chip Tucker, and Kent Whitaker. They
are the persons primarily responsible for selecting the securities for the Fund.

DISCLOSURE OF PORTFOLIO HOLDINGS.

Davis Funds' portfolio holdings are proprietary information which the Adviser is
committed to protecting. Davis Funds have adopted procedures reasonably designed
to ensure that portfolio holdings are not released on a selective basis except
to qualified persons rendering services to the Funds which require that they
receive information concerning portfolio holdings.

Davis Funds may disclose portfolio holdings to outside persons in a number of
situations, including the following: (1) disclosure to a broker-dealer of one or
more securities in connection with the purchase or sale by a Fund of such
securities; (2) requests for price quotations on individual securities from a
broker-dealer for the purpose of calculating the Fund's net asset value; (3)
requests for bids on one or more securities; (4) disclosures in connection with
litigation involving Fund portfolio securities; (5)disclosure to regulatory
authorities; (6) Davis Funds' portfolio managers may from time to time make
statements to the press about a Fund's portfolio and the securities subject to
these statements may or may not have been previously disclosed; (7) employees of
Davis Advisors may attend due diligence meetings with existing or potential
investors in which specific Fund holdings are discussed and other information
which the employee reasonably believes cannot be used in a manner which would be
harmful to the Funds; and Davis Advisors may provide a wide variety of
information about Davis Funds (other than portfolio holdings) to existing and
potential investors and intermediaries working on behalf of such investors. Such
information

may not be available from publicly available information and may consist of
statistical and analytical information concerning the portfolio as a whole and
how it has performed, without naming specific portfolio securities.

Public Disclosure
Information about portfolio holdings which has previously been made public may
be freely shared. Information about portfolio holdings may become "public" by
(1) publication on the Davis Funds' website, (2) filing with the SEC on Form
N-CSR or Form N-Q (only quarterly filings, not voluntary filings), or (3) other
publication determined by the Adviser's Chief Legal Officer or his designee, in
writing stating his rational, to be public.

Davis Funds generally publish their portfolio holdings on fiscal quarters with a
60-day lag. Davis Funds' Executive Vice President, or his designee, may
authorize publication portfolio holdings on a more frequent basis. Portfolio
holdings will then be published on the Davis Funds' website.

Davis Funds' portfolio holdings procedures prohibit release of information
concerning portfolio holdings which have not previously been made public to
individual investors, institutional investors, intermediaries which distribute
the Funds' shares and other parties which are not employed by the Adviser or its
affiliates. Portfolio holdings may be reviewed by third parties for legitimate
business purposes, but only if: (1) The Chief Operating Officer, or his
designee, considers the application for review and, in his or her business
judgment, the requesting third party (i) has a legitimate business purpose for
reviewing the portfolio holdings and (ii) does not pose a material risk to the
client(s) whose portfolios will be reviewed; and (2) The third party enters into
an acceptable Confidentiality Agreement (including a duty not to trade). Davis
Funds' board of directors are notified of the addition of new third parties at
the next scheduled quarterly meeting of the board of directors. The directors
review the addition of new third parties, considering whether or not the release
of information to the third parties is in the best interest of the Funds and
shareholders.

As of December 22, 2004, each of the below listed third parties have been
approved to receive information concerning Davis Funds' portfolio holdings: (1)
KPMG LLP, Independent Registered Public Accounting firm; (2) ISS, Proxy Voting;
(3) UBS, Securities Lending; (4) Vestek, Attribution Reports; and (5) State
Street Bank and Trust, Custodian.

DISTRIBUTION OF FUND SHARES

DISTRIBUTION PLANS. Class A, B, and C shares all use distribution plans to pay
asset-based sales charges or distribution and/or services fees in connection
with the distribution of shares, including payments to financial intermediaries
for providing distribution assistance. Financial intermediaries that receive
these fees may pay some or all of them to their investment professionals.
Because these fees are paid out of a Class's assets on an on-going basis, over
time these fees will increase the cost of an investment and may cost more than
other types of sales and marketing charges.

The Distribution Plans were approved by the Board of Directors of each Davis
Fund in accordance with Rule 12b-1 under the 1940 Act. Rule 12b-1 regulates the
manner in which a mutual fund may assume costs of distributing and promoting the
sale of its shares. Payments pursuant to a Distribution Plan are included in the
operating expenses of the Class.

HOW SHARE CLASSES AFFECT PAYMENTS TO BROKERS. A financial advisor may receive
different compensation for selling one class of shares than for selling another
class. It is important to remember that Class B and C, contingent deferred sales
charges and/or asset-based sales charges have the same purpose as the front-end
sales charge on sales of Class A shares: to compensate the Distributor for
concessions and expenses it pays to dealers and financial institutions for
selling shares. See "Other Payments to Brokers, Dealers or Other Financial
Institutions", below.

RECORDKEEPING FEES. Certain dealers have chosen to maintain omnibus accounts
with the Davis Funds. In an "omnibus account" the Fund maintains a single
account in the name of the dealer and the dealer

maintains all of the individual shareholder accounts. Likewise, for many
retirement plans, a third party administrator may open an omnibus account with
the Davis Funds and the administrator will then maintain all of the participant
accounts. The Adviser, on behalf of the Funds, enters into agreements whereby
the Funds compensate the dealer or administrator for recordkeeping services.

CLASS A SHARES. Payments under the Class A Distribution Plan may be up to an
annual rate of 0.25% of the average daily net asset value of the Class A shares.
Such payments are made to reimburse the Distributor for the fees it pays to its
salespersons and other firms for selling Class A shares, servicing its
shareholders and maintaining its shareholder accounts. Normally, servicing fees
are paid at an annual rate of 0.25% of the average net asset value of the
accounts serviced and maintained on the books of each Davis Fund. In addition,
when the Distributor pays a commission to a broker-dealer for purchases of $1
million or more of Class A shares, the Fund may reimburse the Distributor for
this commission. The Fund will not reimburse this commission if the result would
be that Class A shares would pay Distribution Plan fees in excess of 0.25% of
average assets. Payments under the Class A Distribution Plan also may be used to
reimburse the Distributor for other distribution costs (excluding overhead) not
covered in any year by any portion of the sales charges the Distributor retains.

CLASS B SHARES. Payments under the Class B Distribution Plan are limited to an
annual rate equal to the lesser of 1.25% of the average daily net asset value of
the Class B shares or the maximum amount provided by applicable rule or
regulation of the National Association of Securities Dealers, Inc., which
currently is 1%. Therefore, the effective rate of the Class B Distribution Plan
at present is 1%. In accordance with current applicable rules, such payments
also are limited to 6.25% of gross sales of Class B shares plus interest at 1%
over the prime rate on any unpaid amounts. The Distributor pays broker/dealers
up to 4% in commissions on new sales of Class B shares. Up to an annual rate of
0.75% of the average daily net assets is used to reimburse the Distributor for
these commission payments. Most or all of such commissions are reallowed to
salespersons and to firms responsible for such sales. No commissions are paid by
the Davis Funds with respect to sales by the Distributor to officers, directors
and full-time employees of the Davis Funds, the Distributor, the Adviser, the
Adviser's general partner or the Sub-Adviser. Up to 0.25% of average net assets
is used to reimburse the Distributor for the payment of service and maintenance
fees to its salespersons and other firms for shareholder servicing and
maintenance of its shareholder accounts.

CLASS C SHARES. Payments under the Class C Distribution Plan are limited to an
annual rate equal to the lesser of 1.25% of the average daily net asset value of
the Class C shares or the maximum amount provided by applicable rule or
regulation of the National Association of Securities Dealers, Inc., which
currently is 1%. Therefore, the effective rate of the Class C Distribution Plan
at present is 1%. Class C shares are subject to the same 6.25% and 1%
limitations applicable to the Class B Distribution Plan. The entire amount of
payments may be used to reimburse the Distributor for the payments of
commissions, service and maintenance fees to its salespersons and other firms
for selling new Class C shares, shareholder servicing and maintenance of its
shareholder accounts.

CARRYOVER PAYMENTS. If, due to the foregoing payment limitations, any Davis Fund
is unable to pay the Distributor the 4% commission on new sales of Class B
shares or the 1% commission on new sales of Class C shares, the Distributor
intends, but is not obligated, to accept new orders for shares and pay
commissions in excess of the payments it receives from the Fund. The Distributor
intends to seek full payment from each Davis Fund of any excess amounts with
interest at 1% over the prime rate at such future date, when and to the extent
such payments on new sales would not be in excess of the limitations. Davis
Funds are not obligated to make such payments; the amount (if any), timing and
condition of any such payments are solely within the discretion of the directors
who are not interested persons of the Distributor or the Davis Funds, and have
no direct or indirect financial interest in the Class B or C Distribution Plans
(the "Independent Directors"). If any Davis Fund terminates its Class B or C
share Distribution Plan, the Distributor will ask the Independent Directors to
take whatever action they deem appropriate with regard to the payment of any
excess amounts. Davis Global Fund began operations on December 22, 2004 and as
of that date had not accumulated any carryover payments.

ADDITIONAL INFORMATION CONCERNING THE DISTRIBUTION PLANS. In addition, to the
extent that any investment advisory fees paid by the Davis Funds may be deemed
to be indirectly financing any activity that primarily is intended to result in
the sale of Fund shares within the meaning of Rule 12b-1, the Distribution Plans
authorize the payment of such fees.

The Distribution Plans continue annually so long as they are approved in the
manner provided by Rule 12b-1 or unless earlier terminated by vote of the
majority of the Independent Directors or a majority of the Fund's outstanding
Class of shares. The Distributor is required to furnish quarterly written
reports to the Board of Directors detailing the amounts expended under the
Distribution Plans. The Distribution Plans may be amended, provided that all
such amendments comply with the applicable requirements then in effect under
Rule 12b-1. Currently, Rule 12b-1 provides that as long as the Distribution
Plans are in effect, the Davis Funds must commit the selection and nomination of
candidates for new Independent Directors to the sole discretion of the existing
Independent Directors.

DEALER COMPENSATION. As described herein, dealers or others may receive
different levels of compensation depending on which class of shares they sell.
The Distributor may make expense reimbursements for special training of a
dealer's registered representatives or personnel of dealers and other firms who
provide sales or other services with respect to the Davis Funds and/or their
shareholders, or to defray the expenses of meetings, advertising or equipment.
Any such amounts may be paid by the Distributor from the fees it receives under
the Class A, B, and C Distribution Plans.

In addition, the Distributor may, from time to time, pay additional cash
compensation or other promotional incentives to authorized dealers or agents who
sell shares of the Davis Funds. In some instances, such cash compensation or
other incentives may be offered only to certain dealers or agents who employ
registered representatives who have sold or may sell significant amounts of
shares of the Davis Funds during a specified period of time.

OTHER PAYMENTS TO BROKERS, DEALERS OR OTHER FINANCIAL INSTITUTIONS.

The Adviser and Distributor provide various forms of marketing support and make
additional payments, sometimes called "revenue sharing," to certain brokers,
dealers or other financial institutions for distribution services they perform.
Payments are generally based on the value of shares of the Fund held by the
dealer or financial institution for its customers or based on sales of Fund
shares by the dealer or financial institution, or a combination thereof. The
Adviser may use its profits from the advisory fee it receives from the Fund. In
their sole discretion, the Distributor and the Adviser may increase or decrease
the amount of payments. Some dealers may also choose to pay additional
compensation to their registered representatives who sell the Funds. Such
payments, may be associated with the status of a Fund on a financial
intermediary's preferred list of funds or otherwise associated with the
financial intermediary's marketing and other support activities. The foregoing
arrangements may create an incentive for the brokers, dealers or other financial
institutions, as well as their registered representatives, to sell the Davis
Funds rather than other funds.

In 2004 the Adviser and Distributor made payments to the firms listed below.
These firms may provide the Davis Funds enhanced sales and marketing support and
financial advisers employed by the firms may recommend the Davis Funds rather
than other funds:

ADP Broker Dealer Inc.; AG Edwards & Sons; American Express Financial Advisors
Inc.; Charles Schwab & Co., Inc.; Cigna Financial Services, Inc.; Citistreet
Associates; Citigroup Global Markets Inc.; The Manufacturers Life Insurance
Company NY; The Manufacturers Life Insurance Company U.S.A.; McDonald
Investments, Inc.; Merrill Lynch, Pierce, Fenner & Smith Inc.; Metropolitan Life
Insurance Company; Morgan Stanley Inc.; Fidelity Brokerage Services, Inc.;
Nationwide Financial Services, Inc.; New York Life Investment Management, LLC,
Putnam Fiduciary Trust Company; UBS Financial Services, Inc.; Prudential
Investment Management Services LLC; T Rowe Price Investment Services, Inc.; USB
Piper Jaffray, Inc.; Wachovia Securities, Inc.; and Union Bank of California.

Investors should consult their financial intermediary regarding the details of
the payments they receive in connection with the sale of Fund shares.

Although Davis Funds may use brokers who sell shares of the Funds to effect
portfolio transactions, the Funds do not consider the sale of fund shares as a
factor when selecting brokers to effect portfolio transactions.

Investors should consult their financial intermediary regarding the details of
the payments they receive in connection with the sale of Fund shares.

TRAINING AND EDUCATION. Davis Distributors, LLC may, from time to time, pay
additional cash or other incentives to financial intermediaries in connection
with the sale of shares of a Fund and may also defray certain expenses of
intermediaries incurred in connection with seminars and other educational
efforts subject to Davis Distributors, LLC's policies and procedures governing
payments for such seminars. Such cash or other incentives may include sharing
expenses with financial intermediaries that distribute the Davis Funds for costs
incurred in conducting training and educational meetings about various aspects
of the Funds for the employees of financial intermediaries. In addition, Davis
Distributors, LLC may share expenses with financial intermediaries that
distribute the Funds' shares for costs incurred in hosting client seminars where
the Fund is discussed.

RECORDKEEPING FEES. Certain financial institutions have chosen to maintain
omnibus accounts with the Davis Funds. In an "omnibus account" the Fund
maintains a single account in the name of the dealer and the dealer maintains
all of the individual shareholder accounts. Likewise, for many retirement plans,
a third party administrator may open an omnibus account with the Davis Funds and
the administrator will then maintain all of the participant accounts. The
Adviser, on behalf of the Funds, enters into agreements whereby the Funds
compensate the dealer or administrator for recordkeeping services.

FUND SUPERMARKETS. The Davis Funds participate in various "Fund Supermarkets" in
which a supermarket sponsor (usually a registered broker-dealer) offers many
mutual funds to the supermarket sponsor's clients without charging the clients a
sales charge. The Davis Funds pay the supermarket sponsor a negotiated fee for
distributing the shares and for continuing services provided to their
shareholders. A portion of the supermarket sponsor's fee (that portion related
to sales, marketing or distribution of shares) is paid with fees authorized
under the Distribution Plans.

A portion of the supermarket sponsor's fee (that portion related to shareholder
services such as new account setup, shareholder accounting, shareholder
inquiries, transaction processing, and shareholder confirmations and reporting)
is paid as a shareholder servicing fee of each Davis Fund. Each Davis Fund
typically would be paying these shareholder servicing fees directly, were it not
that the supermarket sponsor holds all customer accounts in a single omnibus
account with each Davis Fund. That portion related to continuing services
provided to shareholders may either be paid by the Fund in cash or with directed
brokerage commissions.

If the supermarket sponsor's fees exceed the sum available from the Distribution
Plans and shareholder servicing fees, then the Adviser pays the remainder out of
its profits.

THE DISTRIBUTOR. Davis Distributors, LLC (the "Distributor"), 2949 East Elvira
Road, Suite 101, Tucson, Arizona 85706, is a wholly owned subsidiary of the
Adviser and, pursuant to a Distributing Agreement, acts as principal underwriter
of the Davis Funds' shares on a continuing basis. By the terms of the
Distributing Agreement, the Distributor pays for all expenses in connection with
the preparation, printing and distribution of advertising and sales literature
for use in offering the Davis Funds' shares to the public, including reports to
shareholders to the extent they are used as sales literature. The Distributor
also pays for the preparation and printing of prospectuses other than those
forwarded to existing shareholders. The continuance and assignment provisions of
the Distributing Agreement are the same as those of the Advisory Agreement.
Davis Global Fund began operations on December 22, 2004 and as of that date had
not paid any sales charges or received compensation on redemptions and
repurchases of shares.

OTHER IMPORTANT SERVICE PROVIDERS

CUSTODIAN. State Street Bank and Trust Company ("State Street" or "Custodian"),
P.O Box 8406, Boston, MA 02266-8406, serves as custodian of each Davis Fund's
assets. The Custodian maintains all of the instruments representing the Davis
Funds' investments and all cash. The Custodian delivers securities against
payment on sale and pays for securities against delivery on purchase. The
Custodian also remits the Davis Funds' assets in payment of their expenses,
pursuant to instructions of officers or resolutions of the Board of Directors.
The Custodian also provides certain fund accounting and transfer agent services.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. KPMG LLP ("KPMG"), 707 17th
Street, Suite 2700, Denver, CO 80202, serves as independent registered public
accountants for each of the Davis Funds. KPMG consults on financial accounting
and reporting matter and meet with the Audit Committee of the Board of
Directors. In addition, KPMG reviews federal and state income tax returns and
related forms.

COUNSEL. Seyfarth Shaw LLP, 55 E. Monroe St., Suite 4200, Chicago, IL
60603-5803, serves as counsel to the Davis Funds and also serves as counsel for
the Independent Directors.

SECTION III: CLASSES OF SHARES, PURCHASES, EXCHANGES AND REDEMPTIONS

This Statement of Additional Information should be read in conjunction with the
prospectus. This Statement of Additional Information supplements the information
available in the prospectus.

SELECTING THE APPROPRIATE CLASS OF SHARES

Each of the Davis Funds offers Class A, B, C, and Y shares. In addition, Davis
New York Venture Fund offers Class R shares. Depending on the amount of the
purchase and the anticipated length of time of the investment, investors may
choose to purchase one Class of shares rather than another. Investors who would
rather pay the entire cost of distribution, or sales charge, at the time of
investment, rather than spreading such cost over time, might consider Class A
shares. Other investors might consider Class B or C shares, in which case 100%
of the purchase price is invested immediately. The Davis Funds will not accept
any purchase of Class B shares in the amount of $100,000 or more per investor.
Such purchase must be made in Class A shares. Class C shares may be more
appropriate for the short-term investor. The Davis Funds will not accept any
purchase of Class C shares when Class A shares may be purchased at net asset
value.

Class A shares

With certain exceptions described below, Class A shares are sold with a
front-end sales charge at the time of purchase and are not subject to a sales
charge when they are redeemed.

Class B shares

Class B shares are sold without a sales charge at the time of purchase, but are
subject to a deferred sales charge if they are redeemed within six years after
purchase. Class B shares will automatically convert to Class A shares eight
years after the end of the calendar month in which the shareholder's order to
purchase was accepted.

Class C shares

Class C shares are purchased at their net asset value per share without the
imposition of a front-end sales charge but are subject to a 1% deferred sales
charge if redeemed within one year after purchase and do not have a conversion
feature.

Class Y shares

Class Y shares are offered to (i) certain institutional investors investing at
least $5,000,000 at any one time and (ii) investors with an account established
under a "wrap account" or other similar fee-based program sponsored and
maintained by a registered broker-dealer approved by the Distributor ("Wrap
Program Investors"). Class Y shares are sold at net asset value without the
imposition of Rule 12b-1 charges.

Class R shares (offered only by Davis New York Venture Fund)

Class R shares generally are available only to certain qualifying retirement
plans. Class R shares are purchased at their net asset value per share without
the imposition of a front-end sales charge.

Shares issued by Davis Government Money Market Fund

The four classes of Davis Government Money Market Fund shares are available so
as to enable investors to facilitate exchanges since, with the exception of
exchanges from Class A shares to Class Y shares, shares may be exchanged only
for shares of the same class. Davis Government Money Market shares are sold
directly without sales charges; however, front-end or deferred sales charges may
be imposed, in certain cases, on their exchange into shares of other Davis Funds
(see "Exchange of Shares"). Shares of the Davis Government Money Market Fund are
offered at net asset value. However, in the case of certain exchanges, the Money
Market Fund shares received may be subject to an escrow, pursuant to a Statement
of Intention, or a contingent deferred sales load. See "Exchange of Shares."

CLASS A SHARES. Class A shares of the Davis Funds (other than shares of Davis
Government Money Market Fund) are sold at their net asset value plus a sales
charge. The amounts of the sales charges are shown in the prospectus.

REDUCTION OF CLASS A SALES CHARGE. There are a number of ways to reduce the
sales charge imposed on the purchase of the Davis Funds' Class A shares, as
described below. These reductions are based on the fact that there is less sales
effort and expense involved with respect to purchases by affiliated persons and
purchases made in large quantities. If you claim any reduction of sales charges,
you or your dealer must notify the Distributor (or State Street Bank and Trust
if the investment is mailed to State Street Bank and Trust) when the purchase is
made. Enough information must be given to verify that you are entitled to such
reduction.

(1) FAMILY OR GROUP PURCHASES. Certain purchases made by or for more than one
person may be considered to constitute a single purchase, including: (i)
purchases for immediate family members, consisting of spouses and children under
21; (ii) purchases by trust or other fiduciary accounts and purchases by
Individual Retirement Accounts for employees of a single employer; and (iii)
purchases made by an organized group of persons, whether incorporated or not, if
the group has a purpose other than buying shares of mutual funds. For further
information on group purchase reductions, contact the Adviser or your dealer.

(2) OTHER GROUPS. Certain purchases made by or for more than one person may be
considered to constitute a single purchase, including: (i) purchases by trust or
other fiduciary accounts and purchases by Individual Retirement Accounts for
employees of a single employer; and (ii) purchases made by an organized group of
persons, whether incorporated or not, if the group has a purpose other than
buying shares of mutual funds. For further information on group purchase
reductions, contact the Adviser or your dealer.

(3) STATEMENTS OF INTENTION. Another way to reduce the sales charge is by
signing a Statement of Intention ("Statement"). See Appendix B: "Terms and
Conditions of a Statement of Intention." If you enter into a Statement of
Intention you (or any "single purchaser") may state that you intend to invest at
least $100,000 in the Fund's Class A shares over a 13-month period. The amount
you say you intend to invest may include Class A shares that you already own
(except purchases into Davis Government Money Market Fund) valued at the
offering price, at the end of the period covered by the Statement. A Statement
may be

backdated up to 90 days to include purchases made during that period, but the
total period covered by the Statement may not exceed 13 months.

Shares having a value of 5% of the amount you state you intend to invest will be
held "in escrow" to make sure that any additional sales charges are paid. If any
of the Fund's shares are in escrow pursuant to a Statement and such shares are
exchanged for shares of another Davis Fund, the escrow will continue with
respect to the acquired shares.

No additional sales charge will be payable if you invest the amount you have
indicated. Each purchase under a Statement will be made as if you were buying
the total amount indicated at one time. For example, if you indicate that you
intend to invest $100,000, you will pay a sales charge of 3-1/2% on each
purchase.

If during the 13-month period you invest less than the amount you have
indicated, you will pay an additional sales charge. For example, if you state
that you intend to invest $250,000 and actually invest only $100,000, you will,
by retroactive adjustment, pay a sales charge of 3-1/2%. The sales charge you
actually pay will be the same as if you had purchased the shares in a single
purchase.

A Statement does not bind you to buy, nor does it bind the Adviser or
Distributor to sell, the shares covered by the Statement.

(4) RIGHTS OF ACCUMULATION (ALL DAVIS FUNDS COMBINED). Another way to reduce the
sales charge is under a right of accumulation. This means that the larger
purchase entitled to a lower sales charge does not have to be in dollars
invested at one time or in a single Davis Fund. The larger purchases that you
(or any "single purchaser") make at any one time can be determined by adding to
the amount of a current purchase to the value of any Davis Fund shares (at
offering price) already owned by you. Money market fund shares are not counted
in determining the total amount of Funds shares you own.

For example, if you own $100,000 worth (at offering price) of shares (including
Class A, B and C shares of all Davis Funds except money market fund shares) and
invest $5,000 in additional shares, the sales charge on that $5,000 investment
would be 3-1/2%, not 4-3/4%.

Similarly, a Statement of Intention for the Fund's Class A shares and for the
Class A shares of the other Davis Funds may be aggregated. Also, the Fund's
Class A shares and the Class A, B and C shares of the other Davis Funds that you
already own, valued at the current offering price at the end of the period
covered by your Statement of Intention, may be included in the amount you have
stated you intend to invest pursuant to your Statement.

Lastly, the right of accumulation also applies to the Class A, B and C shares of
the other Davis Funds that you own. Thus, the amount of current purchases of the
Fund's Class A shares that you make may be added to the value of the Class A, B
and C shares of the other Davis Funds (valued at their current offering price,
excluding money market fund shares) already owned by you in determining the
applicable sales charge.

In all of the above instances where you wish to assert this right of combining
the shares you own of the other Davis Funds, you or your dealer must notify the
Distributor (or State Street Bank and Trust, if the investment is mailed to
State Street Bank and Trust) of the pertinent facts. Enough information must be
given to permit verification as to whether you are entitled to a reduction in
sales charges.

(5) PURCHASES FOR EMPLOYEE BENEFIT PLANS. Trustees or other fiduciary accounts
and Individual Retirement Accounts ("IRA") of a single employer are treated as
purchases of a single person. Purchases of and ownership by an individual and
such individual's spouse under an IRA are combined with their other purchases
and ownership.

CLASS A SHARES SALES AT NET ASSET VALUE. There are situations where the sales
charge will not apply to the purchase of Class A shares. A sales charge is not
imposed on these transactions either because the purchaser deals directly with
the Fund (as in employee purchases), or because a responsible party (such as a
financial institution) is providing the necessary services usually provided by a
registered representative.

Although the investor pays no front-end sales charge, a contingent deferred
sales charge of 0.75% may be imposed if the Distributor paid a sales commission
to a broker or agent and the shares purchased at net asset value without a sales
load are redeemed within the first year after purchase. In addition, if
investors effect purchases in Fund shares through a broker or agent, the broker
or agent may charge a fee. The sales charge will not apply to:

(1) Class A shares purchased through the automatic reinvestment of dividends
and distributions;

(2) Class A shares purchased by (i) current or former directors or officers of
any fund for which the Adviser acts as investment adviser; (ii) officers
and employees of the Adviser, Sub-Adviser or Distributor; and (iii) any
spouse, child (under age 21), parent, grandparent, brother or sister
("immediate family members") of all of the foregoing and any employee
benefit or payroll deduction plan established by or for such persons;

(3) Class A shares purchased by any registered representatives, principals and
employees (and any immediate family member) of securities dealers having a
sales agreement with the Distributor;

(4) Initial purchases of Class A shares totaling at least $250,000 but less
than $5,000,000, made at any one time by banks, trust companies and other
financial institutions on behalf of one or more clients for which such
institution acts in a fiduciary capacity;

(5) Class A shares purchased by any single account covering a minimum of 250
eligible employees or participants (the Fund may, at its discretion, waive
this 250 participant minimum; for example, the 250 participant minimum may
be waived for plans expected to have 250 participants, or for certain
financial institutions providing transfer agent and/or administrative
services, or for fee-based mutual fund marketplace programs) and
representing a defined benefit plan, defined contribution plan, cash or
deferred plan qualified under 401(a) or 401(k) of the Internal Revenue
Code, or a plan established under Section 403(b), 457 or 501(c)(9) of such
Code, "rabbi trusts" or other nonqualified plans;

(6) Class A shares purchased by persons participating in a "wrap account" or
similar fee-based program sponsored and maintained by a registered
broker-dealer approved by the Fund's Distributor or by investment advisors
or financial planners who place trades for their own accounts or the
accounts of their clients and who charge a management, consulting, or other
fee for their services; and clients of such investment advisors or
financial planners who place trades for their own accounts, if the accounts
are linked to the master account of such investment advisor or financial
planner on the books and records of the broker or agent;

(7) Class A shares amounting to less than $5,000,000 purchased by any state,
county, city, department, authority or similar agency; and

(8) Shareholders making purchases in certain accounts offered by securities
firms that have entered into contracts with the Fund and which charge fees
based on assets in the account.

The Fund also may issue Class A shares at net asset value incident to a merger
with or acquisition of assets of an investment company. The Fund occasionally
may be provided with an opportunity to purchase substantially all the assets of
a public or private investment company or to merge another such company into the
Fund. This offers the Fund the opportunity to obtain significant assets. No
dealer concession is involved. It is industry practice to effect such
transactions at net asset value, as it would adversely affect the Fund's ability
to do such transactions if the Fund had to impose a sales charge.

CLASS B SHARES. Class B shares are offered at net asset value, without a
front-end sales charge. The Distributor receives and usually reallows
commissions to firms responsible for the sale of such shares. With certain
exceptions described below, the Davis Funds (except for Davis Government Money
Market Fund) impose a deferred sales charge of 4% on shares redeemed during the
first year after purchase, 3% on shares redeemed during the second or third year
after purchase, 2% on shares redeemed during the fourth or fifth year after
purchase and 1% on shares redeemed during the sixth year after purchase. Class B
shares will be

subject to a maximum Rule 12b-1 fee at the annual rate of 1% of the class'
average daily net asset value. The Davis Funds will not accept any purchase of
Class B shares in the amount of $250,000 or more per investor.

Class B shares that have been outstanding for eight years will automatically
convert to Class A shares without imposition of a front-end sales charge. The
Class B shares so converted will no longer be subject to the higher expenses
borne by Class B shares. Because the net asset value per share of the Class A
shares may be higher or lower than that of the Class B shares at the time of
conversion, although the dollar value will be the same, a shareholder may
receive more or less Class A shares than the number of Class B shares converted.
Under a private Internal Revenue Service Ruling, such a conversion will not
constitute a taxable event under the federal income tax law. In the event that
this ceases to be the case, the Board of Directors will consider what action, if
any, is appropriate and in the best interests of the Class B shareholders. In
addition, certain Class B shares held by certain defined contribution plans
automatically convert to Class A shares based on increases of plan assets.

CLASS B SPECIAL DISTRIBUTION ARRANGEMENT. Davis Funds have entered into an
agreement with Merrill Lynch to waive the Contingent Deferred Sales Charge
("CDSC") of Class B shares sold to Qualifying Retirement Plans. Under this
agreement Class B shares of the Davis Funds are made available to Retirement
Plan participants such as 401K or 403B plans at net asset value with the waiver
of the CDSC if:

(i) The Retirement Plan is record-kept on a daily valuation basis by Merrill
Lynch and, on the date the Retirement Plan sponsor signs the Merrill Lynch
Record Keeping Service Agreement, the Retirement Plan has less than $3
million in assets invested in broker/dealer funds not advised or managed by
Merrill Lynch Asset Management, L.P. ("MLAM") that are made available
pursuant to a Services Agreement between Merrill Lynch and the Funds'
principal underwriter or distributor and in funds advised or managed by
MLAM (collectively, the "Applicable Investments"); or

(ii) The Retirement Plan is record-kept on a daily valuation basis by an
independent record keeper whose services are provided through a contract of
alliance arrangement with Merrill Lynch, and on the date the Retirement
Plan Sponsor signs the Merrill Lynch Record Keeping Service Agreement, the
Retirement Plan has less than $3 million in assets, excluding money market
funds, invested in Applicable Investments; or

(iii) The Retirement Plan has less than 500 eligible employees, as determined by
the Merrill Lynch plan conversion manager, on the date the Retirement Plan
Sponsor signs the Merrill Lynch Record Keeping Service Agreement.

Retirement Plans record-kept on a daily basis by Merrill Lynch or an independent
record keeper under a contract with Merrill Lynch that are currently investing
in Class B shares of the Davis Mutual Funds convert to Class A shares once the
Retirement Plan has reached $5 million invested in Applicable Investments. The
Retirement Plan will receive a Retirement Plan level share conversion.

CLASS C SHARES. Class C shares are offered at net asset value without a sales
charge at the time of purchase. Class C shares redeemed within one year of
purchase will be subject to a 1% charge on redemption. Class C shares do not
have a conversion feature. The Davis Funds will not accept any purchases of
Class C shares when Class A shares may be purchased at net asset value.

The Distributor will pay a commission to the firm responsible for the sale of
Class C shares. No other fees will be paid by the Distributor during the
one-year period following purchase. The Distributor will be reimbursed for the
commission paid from 12b-1 fees paid by the Fund during the one-year period. If
Class C shares are redeemed within one year of purchase, the 1% redemption
charge will be paid to the Distributor. After Class C shares have been
outstanding for more than one year, the Distributor will make quarterly payments
to the firm responsible for the sale of the shares in amounts equal to 0.75% of
the annual average daily net asset value of such shares for sales fees and 0.25%
of the annual average daily net asset value of such shares for service and
maintenance fees.

CONTINGENT DEFERRED SALES CHARGES. Any contingent deferred sales charge ("CDSC")
imposed on the redemption of Class A, B or C shares is a percentage of the
lesser of: (i) the net asset value of the shares redeemed; or (ii) the original
cost of such shares. No CDSC is imposed when you redeem amounts derived from:
(a) increases in the value of shares redeemed above the net cost of such shares,
or (b) certain shares with respect to which the Fund did not pay a commission on
issuance, including shares acquired through reinvestment of dividend income and
capital gains distributions. On request for a redemption, shares not subject to
the CDSC will be redeemed first. Thereafter, shares held the longest will be
redeemed.

The CDSC on Class A, B and C shares that are subject to a CDSC will be waived if
the redemption relates to the following: (a) in the event of the total
disability (as evidenced by a determination by the federal Social Security
Administration) of the shareholder (including registered joint owner) occurring
after the purchase of the shares being redeemed; (b) in the event of the death
of the shareholder (including a registered joint owner); (c) for redemptions
made pursuant to an automatic withdrawal plan, if: (i) there are at least two
withdrawals a year (except for retirement accounts subject to a required minimum
distribution, in which case it may run once a year); and (ii) the aggregate
value of the redeemed shares does not exceed 12% of the account's value on an
annual basis**; (d) for redemptions from a qualified retirement plan or IRA that
constitute a tax-free return of excess contributions to avoid tax penalty; (e)
on redemptions of shares sold to directors, officers and employees of any fund
for which the Adviser acts as investment adviser, or officers and employees of
the Adviser, Sub-Adviser or Distributor, including former directors and officers
and immediate family members of all of the foregoing and any employee benefit or
payroll deduction plan established by or for such persons; and (f) on
redemptions pursuant to the right of the Funds to liquidate a shareholder's
account if the aggregate net asset value of the shares held in such account
falls below an established minimum amount.

** An Automatic Withdrawal Plan may be established as either a percentage or a
fixed dollar amount. The shares that may be redeemed without a sales charge
are recalculated as a percentage of the current market value of the account
as of the date of each withdrawal. If established as a percentage, no sales
charge will be incurred regardless of market fluctuations. If established
as a fixed dollar amount, a sales charge may be incurred if the market
value of the account decreases. If you redeem shares in addition to those
redeemed pursuant to the Automatic Withdrawal Plan, a deferred sales charge
may be imposed on those shares and on any subsequent redemptions within a
12-month period, regardless of whether such redemptions are pursuant to an
Automatic Withdrawal Plan.

Subject to various limitations, shares in different Davis Funds may be exchanged
at relative net asset value. If a sales charge is due on Class A shares, and has
not been previously paid, then the sales charge will be deducted at the time of
the exchange. If any Davis Fund shares being exchanged are subject to a sales
charge, Statement of Intention, or other limitation, the limitation will
continue to apply to the shares received in the exchange. When an investor
exchanges Class B or C shares in a Davis Fund for shares in Davis Government
Money Market Fund, the holding period for any deferred sales charge does not
continue during the time that the investor owns Davis Government Money Market
Fund shares. For example, Class B shares are subject to a declining sales charge
for six years. Any period that an investor owns shares of Davis Government Money
Market Fund will be added to the six-year declining sales charge period. Class A
shares sold at net asset value subject to a deferred sales charge will continue
to age while invested in Davis Government Money Market Fund shares.

CLASS Y SHARES. Class Y shares are offered through a separate prospectus to: (i)
trust companies, bank trusts, endowments, pension plans or foundations
("Institutions") acting on behalf of their own account or one or more clients
for which such Institution acts in a fiduciary capacity and investing at least
$5,000,000 at any one time; (ii) any state, county, city, department, authority
or similar agency that invests at least $5,000,000 ("Government Entities");
(iii) any investor with an account established under a "wrap account" or other
similar fee-based program sponsored and maintained by a registered broker-dealer
approved by the Davis Funds' Distributor ("Wrap Program Investors"); and (iv) at
least $500,000 for a 401(k) plan, 457 plan, employer sponsored 403(b) plan,
profit sharing and money purchase pension plan, defined benefit plan, or
non-qualified deferred compensation plan where plan level or omnibus accounts
are held on the books of the Fund.

Wrap Program Investors may purchase Class Y shares through the sponsors of such
programs who have entered into agreements with Davis Distributors, LLC. Wrap
Program Investors should be aware that both Class A and Y shares are made
available by the Davis Funds at net asset value to sponsors of wrap programs.
However, Class A shares are subject to additional expenses under the Fund's Rule
12b-1 Plan and sponsors of wrap programs utilizing Class A shares generally are
entitled to payments under the Plan. If the Sponsor has selected Class A shares,
investors should discuss these charges with their program's sponsor and weight
the benefits of any services to be provided by the sponsor against the higher
expenses paid by Class A shareholders.

The Distributor may waive the investment minimums at its discretion. For
purposes of the minimums, the Distributor may treat appropriately related
investors (for example, trust funds of the same bank, separate accounts of the
same insurance company, clients whose funds are managed by a single bank,
insurance company, investment adviser, broker-dealer, or institutional clients
of a financial intermediary that maintains an omnibus account with the fund) as
a single investor.

CLASS R SHARES (OFFERED ONLY BY DAVIS NEW YORK VENTURE FUND). Class R shares are
offered through a separate prospectus and generally are available only to 401(k)
plans, 457 plans, employer sponsored 403(b) plans, profit sharing and money
purchase pension plans, defined benefit plans, and non-qualified deferred
compensation plans. Class R shares are also generally available only to
retirement plans where plan level or omnibus accounts are held on the books of
the Fund. Class R shares generally are not available to retail non-retirement
accounts, traditional and Roth IRAs, Coverdell Education Savings Accounts, SEPs,
SAR-SEPs, SIMPLE IRAs, and Individual 403(b) plans.

HOW TO PURCHASE SHARES

Davis Funds and the Distributor reserve the right to reject any purchase order
for any reason. Each Davis Fund prospectus provides full directions on how to
purchase shares.

Broker-Dealers may remit payment

Your broker-dealer may order and remit payment for the shares on your behalf.
The broker-dealer can also order the shares from the Distributor by telephone or
wire. Please note that the following rules and provisions apply with respect to
purchases of Fund shares through a broker-dealer:

(A) The Distributor has entered into agreements with broker-dealers to
receive on its behalf purchase and redemptions orders;

(B) Such broker-dealers are authorized to designate other intermediaries
to receive purchase and redemption orders on behalf of the
Distributor;

(C) The Funds will be deemed to have received a purchase or redemption
order when an authorized broker or, if applicable, its broker's
authorized designee, receives the order; and

(D) A Client order will be priced at the Fund's net asset value next
computed after they are received by an authorized broker-dealer or the
broker-dealer's authorized designee.

SPECIAL SERVICES

Each Davis Funds prospectus describes a number of special services offered by
the Davis Funds. This Statement of Additional Information supplements that
discussion.

PROTOTYPE RETIREMENT PLANS. The Distributor and certain qualified dealers have
available prototype retirement plans (e.g., profit sharing, money purchase,
Simplified Employee Pension ("SEP") plans, model 403(b) and 457 plans for
charitable, educational and governmental entities) sponsored by the Davis Funds
for corporations and self-employed individuals. The Distributor and certain
qualified dealers also have prototype Individual Retirement Account ("IRA")
plans (deductible IRAs; and non-deductible IRAs, including "Roth IRAs"),
Education Savings Accounts and SIMPLE IRA plans for both individuals and
employers. These plans utilize the shares of the Davis Funds as their investment
vehicle. State Street Bank and Trust acts as custodian or trustee for certain
retirement plans and charges the participant an annual

maintenance fee of $15 per Social Security Number regardless of the number of
plans established. The maintenance fee will be redeemed automatically at
year-end from your account, unless you elect to pay the fee directly prior to
that time. The maintenance fee will be waived for accounts sharing the same
Social Security Number if the accounts total at least $50,000 in cumulative
assets (including taxable accounts). If an IRA account is closed, a $15 fee will
be assessed.

IN-KIND PURCHASES. Shares of the Davis Funds are continuously offered at their
public offering price next determined after an order is accepted. The methods
available for purchasing shares of a fund are described in the fund's
Prospectus. In addition, shares of the Davis Funds may be purchased using
securities if the Adviser determines that doing so is in the best interest of
the applicable fund and its shareholders. The Adviser must review the securities
that are offered in exchange for the "in-kind" purchase to determine that the
securities delivered to the fund: (i) meet the investment objective, strategy
and policies of the fund; (ii) do not cause the violation of any investment
restrictions at the time of acceptance; (iii) are readily marketable; (iv) may
be accurately and objectively valued on a daily basis; and (v) represent
securities that are desirable for the fund to own given the fund's investment
strategy and the Adviser's view of market conditions. The Adviser reserves the
right to reject all or any part of the securities offered in exchange for shares
of the fund. On any such in-kind purchase, the following conditions will apply:

(1) The securities offered by the investor in exchange for shares of a fund
must not be in any way restricted as to resale or otherwise be illiquid;
(2) The securities must have a value that is readily ascertainable (and not
established only by evaluation procedures) as evidenced by a listing on the
NYSE, AMEX or NASDAQ or other appropriate method; and
(3) The transaction involves a net purchase of $1 million or more in fund
shares.

Davis Funds believe that this ability to purchase shares of a fund using
securities provides a means by which holders of certain securities may obtain
diversification and continuous professional management of their investments
without the expense of selling those securities in the public market. Benefits
to the fund include the ability to purchase desirable securities without
brokerage commissions.

An investor who wishes to make an in-kind purchase must provide the Adviser with
a full and exact written description of each security that he or she proposes to
deliver to the applicable Davis Fund. The fund will advise the investor as to
those securities that it is prepared to accept and will provide the forms
required to be completed and signed by the investor. The investor should then
send the securities, in proper form for transfer and with the necessary forms,
to the Adviser and certify that there are no legal or contractual restrictions
on the free transfer and sale of the securities. The securities will be valued
as of the close of business on the day of receipt by the fund in the same manner
as portfolio securities of the fund are valued. The number of shares of the
fund, having a net asset value as of the close of business on the day of receipt
equal to the value of the securities delivered by the investor, will be issued
to the investor, less applicable stock transfer taxes, if any.

The exchange of securities by the investor pursuant to this in-kind offer will
constitute a taxable transaction and may result in a gain or loss for federal
income tax purposes. Each investor should consult his tax adviser to determine
the tax consequences under Federal and state law of making such an in-kind
purchase. This service may be discontinued at any time without prior notice.

EXCHANGE OF SHARES

The prospectus describes exchange procedures. This Statement of Additional
Information supplements that discussion.

MARKET TIMING. Davis Funds have not entered into any arrangements which permit
organizations or individuals to market time the Funds. Although the Davis Funds
will not knowingly permit investors to excessively trade the Funds, shareholders
seeking to engage in market timing may employ a variety of strategies to avoid
detection, and, there can be no guarantee that all market timing will be
prevented,

despite the Davis Funds' best efforts. The Funds receive purchase and sales
order through financial intermediaries and cannot always know or reasonably
detect excessive trading which may be facilitated by these intermediaries or by
the use of omnibus accounts by intermediaries. The Davis Funds reserve the right
to terminate or amend the exchange privilege at any time by filing amended
registration statements.

REDEMPTION OF SHARES

The prospectus describes redemption procedures. This Statement of Additional
Information supplements that discussion.

CERTIFICATES. In the past the Davis Funds issued share certificates, and some
still are outstanding. If shares to be redeemed are represented by a
certificate, the certificate must be sent to State Street Bank and Trust with a
letter of instruction signed by all account owner(s).

REDEMPTION PROCEEDS. Redemption proceeds normally are paid to you within seven
days after State Street Bank and Trust receives your proper redemption request.
Payment for redemptions can be suspended under certain emergency conditions
determined by the SEC, or if the New York Stock Exchange is closed for other
than customary or holiday closings. You may redeem shares on any business day.
Redemption proceeds may be withheld until a sufficient period of time has passed
for State Street Bank and Trust to be reasonably sure that all checks or drafts
(including certified or cashiers checks) for shares purchased have cleared,
normally not exceeding fifteen calendar days. You can avoid any redemption delay
by paying for your shares with a bank wire or federal funds.

Redemptions are ordinarily paid to you in cash. However, the Board of Directors
is authorized to decide if conditions exist making cash payments undesirable
(although the Board has never reached such a decision). If the Board of
Directors should decide to make payments other than in cash, redemptions could
be paid in securities, valued at the value used in computing a Fund's net asset
value. There would be brokerage costs incurred by the shareholder in selling
such redemption proceeds. We must, however, redeem shares solely in cash up to
the lesser of $250,000 or 1% of the Fund's net asset value, whichever is
smaller, during any 90-day period for any one shareholder.

SHORT-TERM TRADING FEE. The Fund assesses a 2% fee on the proceeds of Fund
shares that are redeemed (either by selling or exchanging to another Davis Fund)
within 30 days of their purchase. The redemption fee is paid to the Fund, and is
intended to offset the trading costs, market impact and other costs associated
with short-term money movements in and out of the Fund. The redemption fee is
imposed to the extent that Fund shares redeemed exceed Fund shares that have
been held more than 30 days. For shares of the Fund acquired by exchange, the
holding period prior to the exchange is not considered in determining whether to
apply the redemption fee. The redemption fee is not imposed on shares held in
certain omnibus accounts, including :

(1) shares held in retirement plans qualified under Sections 401(a) or 401(k)
of the Internal Revenue Code, Section 403(b)(7) custodial plan accounts, or
plans administered as college savings programs under Section 529 of the
Internal Revenue Code,
(2) shares redeemed under automatic withdrawal plans,
(3) shares redeemed due to death or disability of the shareholder, or
(4) shares redeemed from accounts for which the dealer, broker or financial
institution of record has entered into an agreement with the Distributor
for this purpose.

FEDERAL FUNDS WIRE. You may be eligible to have your redemption proceeds
electronically transferred to a commercial bank account by federal funds wire.
There is a $5 charge by State Street Bank and Trust for wire service (State
Street Bank and Trust charges $50 for wiring money internationally), and
receiving banks also may charge for this service. Redemption by federal funds
wire is usually credited to your bank account on the next business day after the
sale. Alternatively, redemption through Automated Clearing House usually will
arrive at your bank two banking days after the sale. To have redemption proceeds
sent by federal funds wire to your bank, you must first fill out the "Banking
Instruction" section on the account

application form and attach a voided check or deposit slip. If the account has
already been established, an Account Service Form or letter of instruction must
be submitted with a medallion guarantee and a copy of a voided check or deposit
slip.

SEGREGATION OF DAVIS GOVERNMENT MONEY MARKET FUND SHARES. In order to secure the
payment of any sales charge or CDSC that may be due on shares exchanged into
shares of Davis Government Money Market Fund, the number of shares equal in
value to the sales charge are segregated and separately maintained in Davis
Government Money Market Fund. The purpose of the segregation is to assure that
redemptions utilizing the Davis Government Money Market Fund check writing
privilege do not deplete the account without payment of any applicable sales
charge and therefore no draft will be honored for liquidation of shares in
excess of the shares in the Davis Government Money Market Fund account that are
free of segregation.

SECTION IV: GENERAL INFORMATION

This Statement of Additional Information should be read in conjunction with the
prospectus. This Statement of Additional Information supplements the information
available in the prospectus.

DETERMINING THE PRICE OF SHARES

The prospectus describes procedures used to determine the price of shares. This
Statement of Additional Information supplements that discussion.

NET ASSET VALUE. The price per share for purchases or redemptions made directly
through State Street Bank and Trust generally is the value next computed after
State Street Bank and Trust receives the purchase order or redemption request.
In order for your purchase order or redemption request to be effective on the
day you place your order with your broker-dealer or other financial institution,
such broker-dealer or financial institution must: (i) receive your order before
4 p.m. Eastern Standard Time; and (ii) promptly transmit the order to State
Street Bank and Trust. The broker-dealer or financial institution is responsible
for promptly transmitting purchase orders or redemption requests to State Street
Bank and Trust so that you may receive the same day's net asset value. Note that
in the case of redemptions and repurchases of shares owned by corporations,
trusts or estates, or of shares represented by outstanding certificates (in the
past Davis Funds issued share certificates), State Street Bank and Trust may
require additional documents to effect the redemption and the applicable price
will be determined as of the close of the next computation following the receipt
of the required documentation or outstanding certificates. See "Redemption of
Shares."

The Davis Funds do not price their shares or accept orders for purchases or
redemptions on days when the New York Stock Exchange is closed. Such days
currently include New Year's Day, Martin Luther King Jr. Day, President's Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day.

Certain brokers and certain designated intermediaries on their behalf may accept
purchase and redemption orders. The Distributor will be deemed to have received
such an order when the broker or the designee has accepted the order. Customer
orders are priced at the net asset value next computed after such acceptance.
Such order may be transmitted to the Davis Funds or their agents several hours
after the time of the acceptance and pricing.

VALUATION OF PORTFOLIO SECURITIES. The valuation of each Fund's portfolio
securities is described in the Fund's prospectus and annual report.

DIVIDENDS AND DISTRIBUTIONS

The prospectus describes the Fund's dividend and distribution policies. This
Statement of Additional Information supplements that discussion.

There are two sources of income, net income and realized capital gains, paid to
you by a fund. You will receive confirmation statements for dividends declared
and shares purchased through reinvestment of dividends. You also will receive
confirmations after each purchase or redemption. Different classes of shares may
be expected to have different expense ratios due to differing distribution
services fees and certain other expenses. Classes with higher expense ratios
will pay correspondingly lower dividends than classes with lower expense ratios.
For tax purposes, information concerning distributions will be mailed annually
to shareholders. Shareholders have the option of receiving all dividends and
distributions in cash, of having all dividends and distributions reinvested, or
of having income dividends paid in cash and capital gain distributions
reinvested. Reinvestment of all dividends and distributions is automatic for
accounts utilizing the Automatic Withdrawal Plan. The reinvestment of dividends
and distributions is made at net asset value (without any initial or contingent
deferred sales charge) on the payment date.

RETURNED CHECK POLICY. For the protection of the shareholder, on receipt of the
second dividend check that has been returned to State Street Bank and Trust as
undeliverable, undelivered dividends will be invested in additional shares at
the current net asset value and the account designated as a dividend
reinvestment account.

Davis Global Fund usually pays dividends and distributions, if any, once a year.
However, the Board of Directors reserves the right to suspend payments or to
make additional payments.

DIVIDENDS AND DISTRIBUTIONS MAY CHANGE. Usually dividends and capital gains
distributions are paid as discussed above. However, the Board of Directors
reserves the right to suspend payments or to make additional payments.

FEDERAL INCOME TAXES

The prospectus provides an introduction to federal income taxes. This Statement
of Additional Information supplements that discussion. This discussion is not
intended to be a full discussion of all the aspects of the federal income tax
law and its effects on the Funds and their shareholders. Shareholders may be
subject to state and local taxes on distributions. Each investor should consult
his or her own tax adviser regarding the effect of federal, state and local
taxes on any investment in the Davis Funds.

Each of the Davis Funds intend to continue to qualify as a regulated investment
company under the Internal Revenue Code (the "Code") and, if so qualified, will
not be liable for federal income tax to the extent its earnings are distributed.
If, for any calendar year, the distribution of earnings required under the Code
exceeds the amount distributed, an excise tax, equal to 4% of the excess, will
be imposed on the applicable Fund. Each Davis Fund intends to make distributions
during each calendar year sufficient to prevent imposition of the excise tax.

Distributions of net investment income and net realized short-term capital gains
will be taxable to shareholders as ordinary income. Distributions of net
long-term capital gains will be taxable to shareholders as long-term capital
gain regardless of how long the shares have been held. Distributions will be
treated the same for tax purposes whether received in cash or in additional
shares. Dividends declared in the last calendar month to shareholders of record
in such month and paid by the end of the following January are treated as
received by the shareholder in the year in which they are declared. A gain or
loss for tax purposes may be realized on the redemption of shares. If the
shareholder realizes a loss on the sale or exchange of any shares held for six
months or less and if the shareholder received a capital gain distribution
during that period, then the loss is treated as a long-term capital loss to the
extent of such distribution.

We recommend that you consult with a tax advisor about dividends and capital
gains that may be received from the Davis Funds.

PERFORMANCE DATA

From time to time, the Fund may advertise information regarding its performance.
Such information will be calculated separately for each class of shares. These
performance figures are based on historical results and are not intended to
indicate future performance.

Davis Global Fund began operations on December 22, 2004 and as of that date had
not yet accumulated a performance record. When the Fund begins to report
performance, it may use one or more of the following measures:

"Average Annual Total Return" represents the average annual compounded rate of
return for the periods presented. Periods of less than one year are not
annualized. Average annual total return measures both the net investment income
generated by, and the effect of any realized or unrealized appreciation or
depreciation of, the underlying investments in the fund's portfolio. Average
annual total return is calculated separately for each class in accordance with
the standardized method prescribed by the SEC by determining the average annual
compounded rates of return over the periods indicated, which would equate the
initial amount invested to the ending redeemable value, according to the
following formula:

P(1+T)(n) = ERV
Where: P = hypothetical initial payment of $1,000
T = average annual total return
n = number of years

ERV = ending redeemable value at the end of the 1-, 5-
and 10-year periods of a hypothetical $1,000
payment made at the beginning of such period

This calculation: (i) assumes all dividends and distributions are reinvested at
net asset value on the appropriate reinvestment dates; and (ii) deducts: (a) the
maximum front-end or applicable contingent deferred sales charge from the
hypothetical initial $1,000 investment, and (b) all recurring fees, such as
advisory fees, charged as expenses to all shareholder accounts.

"Average Annual Total Return After-Taxes on Distributions" adjusts the before
taxes quotation for the effects of paying the highest individual marginal
federal income tax rate on distributions paid by the Fund. Average annual total
return after-taxes on distributions is calculated separately for each class in
accordance with the standardized method prescribed by the SEC by determining the
average annual compounded rates of return over the periods indicated, that would
equate the initial amount invested to the ending redeemable value, according to
the following formula:

P(1+T)n = ATVD
Where: P = hypothetical initial payment of $1,000
T = average annual total return (after taxes on
distributions)
n = number of years
ATVD = ending redeemable value, after
taxes on fund distributions but not
after taxes on sale of fund shares,
at the end of the 1, 5, and 10 year
periods of a hypothetical $1,000
payment made at the beginning of
such period

"Average Annual Total Return After-Taxes on Distributions and Sale of Fund
Shares" adjusts the after-taxes quotation for the effects of paying the highest
individual marginal federal income tax rate on the sale of Fund shares. Average
annual total return after-taxes on distributions and sale of Fund shares is
calculated separately for each class in accordance with the standardized method
prescribed by the SEC by determining

the average annual compounded rates of return over the periods indicated, that
would equate the initial amount invested to the ending redeemable value,
according to the following formula:

P(1+T)n = ATVDR
Where: P = hypothetical initial payment of $1,000
T = average annual total return (after taxes
on distributions and sale of Fund shares) n
= number of years
ATVDR = ending redeemable
value, after taxes on fund distributions and
sale of fund shares, at the end of the period
of a hypothetical $1,000 payment made at the
beginning of such period

"Average Annual Total Return (without any sales charges)" adjusts the average
annual total return (with maximum sales charges) quotation by removing the
effects of paying a sales charge. The Fund may compare its investment
performance against that of a relevant benchmark index. Index performance
calculation does not include a sales charge. To facilitate comparisons between
an index and the Fund, the Fund may quote its average annual total return before
taxes, without a sales charge.

OTHER PERFORMANCE MEASURES

"Cumulative Total Return" is a measure of a fund's performance encompassing all
elements of return. Total return reflects the change in share price over a given
period and assumes all distributions are taken in additional fund shares. Total
return is determined by assuming a hypothetical investment at the beginning of
the period, deducting a maximum front-end or applicable contingent deferred
sales charge, adding in the reinvestment of all income dividends and capital
gains, calculating the ending value of the investment at the net asset value as
of the end of the specified time period and subtracting the amount of the
original investment, and by dividing by the original investment. This calculated
amount is then expressed as a percentage by multiplying by 100. Periods of less
than one year are not annualized.

PERFORMANCE RANKINGS

Lipper Rankings. From time to time the Fund may publish the ranking of the
performance of its classes of shares by Lipper Analytical Services, Inc. Lipper
is a widely recognized independent mutual fund monitoring service. Lipper
monitors the performance of regulated investment companies, including the Fund,
and ranks their performance for various periods in categories based on
investment style. The Lipper performance rankings are based on total returns
that include the reinvestment of capital gain distributions and income dividends
but do not take sales charges or taxes into consideration. Lipper also publishes
"peer-group" indices of the performance of all mutual funds in a category that
it monitors and averages of the performance of the funds in particular
categories.

Morningstar Ratings and Rankings. From time to time each Fund may publish the
ranking and/or star rating of the performance of its classes of shares by
Morningstar, Inc., an independent mutual fund monitoring service. Morningstar
rates and ranks mutual funds in broad investment categories: domestic stock
funds, international stock funds, taxable bond funds and municipal bond funds.

Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is
proprietary to Morningstar and/or its content providers, (2) may not be copied
or distributed, and (3) is not warranted to be accurate, complete or timely.
Neither Morningstar nor its content providers are responsible for any damages or
losses arising from any use of this information. Past performance is no
guarantee of future result.

For each fund with at least a three-year history, Morningstar calculates a
Morningstar Rating(TM) metric each month by subtracting the return on a 90-day
U.S. Treasury Bill from the fund's load-adjusted return for the same period, and
then adjusting this excess return for risk. The top 10% of funds in each broad
asset class receive five stars, the next 22.5% receive four stars, the next 35%
receive three stars, the next 22.5% receive two stars and the bottom 10% receive
one star. The Overall Morningstar Rating for a fund is derived from a weighted
average of the performance figures associated with its three-, five- and 10-year
(if applicable) Morningstar Rating metrics. Past performance is no guarantee of
future results.

Each Fund also may compare its total return ranking to that of other funds in
its Morningstar category, in addition to its star ratings. Those total return
rankings are percentages from one percent to one hundred percent and are not
risk adjusted. For example, if a fund is in the 94th percentile, that means that
94% of the funds in the same category performed better than it did.

Performance Rankings and Comparisons by Other Entities and Publications. From
time to time the Fund may include in its advertisements and sales literature
performance information about the Fund cited in newspapers and other periodicals
such as The New York Times, The Wall Street Journal, Barron's or similar
publications. That information may include performance quotations from other
sources, including

Lipper and Morningstar. The performance of the Fund's classes of shares may be
compared in publications to the performance of various market indices or other
investments and averages, performance rankings or other benchmarks prepared by
recognized mutual fund statistical services.

Investors also may wish to compare the returns on each Davis Fund's share
classes to the return on fixed-income investments available from banks and
thrift institutions. Those include certificates of deposit, ordinary
interest-paying checking and savings accounts and other forms of fixed- or
variable-time deposits and various other instruments such as Treasury bills.
However, none of the Davis Funds' returns or share prices are guaranteed or
insured by the FDIC or any other agency and will fluctuate daily, while bank
depository obligations may be insured by the FDIC and may provide fixed rates of
return. Repayment of principal and payment of interest on Treasury securities is
backed by the full faith and credit of the U.S. government.

From time to time, the Fund may publish rankings or ratings of the Adviser or
Transfer Agent and of the investor services provided by them to shareholders of
the Davis Funds, other than performance rankings of the Funds themselves. Those
ratings or rankings of shareholder and investor services by third parties may
include comparisons of their services to those provided by other mutual fund
families selected by the rating or ranking services. They may be based on the
opinions of the rating or ranking service itself, using its research or
judgment, or based on surveys of investors, brokers, shareholders or others.

OTHER PERFORMANCE STATISTICS

In reports or other communications to shareholders and in advertising material,
the performance of the Fund may be compared to recognized unmanaged indices or
averages of the performance of similar securities. Also, the performance of the
Fund may be compared to that of other funds of comparable size and objectives as
listed in the rankings prepared by Lipper Analytical Services, Inc.,
Morningstar, Inc., or similar independent mutual fund rating services, and the
Fund may use evaluations published by nationally recognized independent ranking
services and publications. Any given performance comparison should not be
considered representative of the Fund's performance for any future period.

In advertising and sales literature the Davis Funds may publish various
statistics describing its investment portfolio such as the Fund's average Price
to Book and Price to Earnings ratios, beta, alpha, R-squared, standard
deviation, etc.

The performance of the Fund may be compared in publications to the performance
of various indices and investments for which reliable performance data is
available and to averages, performance rankings or other information prepared by
recognized mutual fund statistical services.

The Fund's Annual Report and Semi-Annual Report contain additional performance
information and will be made available on request and without charge by calling
Davis Funds toll-free at 1-800-279-0279, Monday through Friday, 9 a.m. to 6 p.m.
Eastern Standard Time.

APPENDIX A:
QUALITY RATINGS OF DEBT SECURITIES

MOODY'S CORPORATE BOND RATINGS

AAA - Bonds that are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and generally are referred to as
"gilt-edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are unlikely to impair the
fundamentally strong position of such issues.

AA - Bonds that are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what generally are known as high-grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities, fluctuation of protective elements may
be of greater amplitude, or there may be other elements present that make the
long-term risks appear somewhat larger than Aaa securities.

A - Bonds that are rated A possess many favorable investment attributes and are
to be considered as upper medium-grade-obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present that
suggest a susceptibility to impairment sometime in the future.

BAA - Bonds that are rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

BA - Bonds that are rated Ba are judged to have speculative elements as their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.

B - Bonds that are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any longer period of time may be small.

CAA - Bonds that are rated Caa are of poor standing. Such issues may be in
default, or there may be present elements of danger with respect to principal or
interest.

CA - Bonds that are rated Ca represent obligations that are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.

C - Bonds that are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.

STANDARD & POOR'S CORPORATE BOND RATINGS

AAA - Debt rated AAA has the highest rating assigned by Standard and Poor's.
Capacity to pay interest and repay principal is extremely strong.

AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in small degree.

A - Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.

BBB - Debt rated BBB is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.

BB - Debt rated BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial or economic conditions that could lead to inadequate
capacity to meet timely interest and principal payments. The BB rating category
also is used for debt subordinated to senior debt that is assigned an actual or
implied BBB- rating.

B - Debt rated B has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial or economic conditions will likely impair capacity or willingness to
pay interest and repay principal. The B rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied BB or BB-
rating.

CCC - Debt rated CCC has a currently identifiable vulnerability to default and
is dependent on favorable business, financial and economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial or economic conditions, it is not likely to have the
capacity to pay interest and repay principal. The CCC rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
B or B- rating.

CC - The rating CC typically is applied to debt subordinated to senior debt that
is assigned an actual or implied CCC rating.

C - The rating C is typically applied to debt subordinated to senior debt that
is assigned an actual or implied CCC- debt rating. The C rating may be used to
cover a situation where a bankruptcy petition has been filed, but debt service
payments are continued.

CI - The rating CI is reserved for income bonds on which no interest is being
paid.

D - Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period. The D rating also will be used on the
filing of a bankruptcy petition if debt service payments are jeopardized.

MOODY'S COMMERCIAL PAPER RATINGS

Moody's commercial paper ratings are opinions of the ability of issuers to repay
punctually promissory obligations not having an original maturity in excess of
nine months. Moody's employs the following three designations, all judged to be
investment grade, to indicate the relative repayment capacity of rated issuers:
Prime-1 (superior capacity), Prime-2 (strong capacity) and Prime-3 (acceptable
capacity). In assigning ratings to an issuer that represents that its commercial
paper obligations are supported by the credit of another entity or entities,
Moody's evaluates the financial strength of the indicated affiliated
corporations, commercial banks, insurance companies, foreign governments or
other entities, but only as one factor in the total rating assessment.

STANDARD & POOR'S COMMERCIAL PAPER RATINGS

The S&P commercial paper rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of no more than 365 days.
Ratings are graded in four categories, ranging from A for the highest quality to
D for the lowest. Issues assigned an A rating are regarded as having the
greatest capacity for timely payment. Within the A category, the numbers 1, 2
and 3 indicate relative degrees of safety. The addition of a plus sign to the
category A-1 denotes that the issue is determined to possess overwhelming safety
characteristics.

APPENDIX B:
TERMS AND CONDITIONS FOR A STATEMENT OF INTENTION

(CLASS A SHARES ONLY)

TERMS OF ESCROW:

1. Out of my initial purchase (or subsequent
purchases if necessary) 5% of the dollar amount
specified in this Statement will be held in
escrow by State Street Bank and Trust in the
form of shares (computed to the nearest full
share at the public offering price applicable to
the initial purchase hereunder) registered in my
name. For example, if the minimum amount
specified under this statement is $100,000 and
the public offering price applicable to
transactions of $100,000 is $10 a share, 500
shares (with a value of $5,000) would be held in
escrow.

2. In the event I should exchange some or all of my
shares to those of another mutual fund for which
Davis Distributors, LLC, acts as distributor,
according to the terms of this prospectus, I
hereby authorize State Street Bank and Trust to
escrow the applicable number of shares of the
new fund, until such time as this Statement is
complete.

3. If my total purchases are at least equal to the
subject matter of this Agreement unless intended
purchases, the shares in escrow will requested
to do so and indemnified to its be delivered to
me or to my order. satisfaction against the cost
and expense of

4. If my total purchases are less than the intended
purchases, I will remit to Davis Distributors,
LLC, the difference in the dollar amount of
sales charge actually paid by me and the sales
charge that I would have paid if the total
purchase had been made at a single time. If
remittance is not made within 20 days after
written request by Davis Distributors, LLC, or
my dealer, State Street Bank and Trust will
redeem an appropriate number of the escrowed
shares in order to realize such difference.

5. I hereby irrevocably constitute and appoint
State Street Bank and Trust my attorney to
surrender for redemption any or all escrowed
shares with full power of substitution in the
premises.

6. Shares remaining after the redemption referred
to in Paragraph No. 4 will be credited to my
account.

7. The duties of State Street Bank and Trust are
only such as are herein provided being purely
ministerial in nature, and it shall incur no
liability whatever except for willful misconduct
or gross negligence so long as it has acted in
good faith. It shall be under no responsibility
other than faithfully to follow the instructions
herein. It may consult with legal counsel and
shall be fully protected in any action taken in
good faith in accordance with advice from such
counsel. It shall not be required to defend any
legal proceedings that may be instituted against
it in respect of the such defense.

APPENDIX C

SUMMARY OF DAVIS ADVISORS'
PROXY VOTING PROCEDURES AND POLICIES
APRIL 1, 2004

Davis Selected Advisers, L.P. ("Davis Advisors") votes on behalf of its clients
in matters of corporate governance through the proxy voting process. Davis
Advisors takes its ownership responsibilities very seriously and believes the
right to vote proxies for its clients' holdings is a significant asset of the
clients. Davis Advisors exercises its voting responsibilities as a fiduciary,
solely with the goal of maximizing the value of its clients' investments.

Davis Advisors votes proxies with a focus on the investment implications of each
issue. For each proxy vote, Davis Advisors takes into consideration its duty to
clients and all other relevant facts available to Davis Advisors at the time of
the vote. Therefore, while these guidelines provide a framework for voting,
votes are ultimately cast on a case-by-case basis.

Davis Advisors has adopted written Proxy Voting Procedures and Policies and
established a Proxy Oversight Group to oversee voting policies and deal with
potential conflicts of interest. In evaluating issues, the Proxy Oversight Group
may consider information from many sources, including the portfolio manager for
each client account, management of a company presenting a proposal, shareholder
groups, and independent proxy research services.

Clients may obtain a copy of Davis Advisors' Proxy Voting Procedures and
Policies, and/or a copy of how their own proxies were voted, by writing to:

Davis Selected Advisers, L.P.
Attn: Chief Compliance Officer
2949 East Elvira Road, Suite 101
Tucson, Arizona, 85706

A copy of Davis Advisors' Proxy Voting Procedures and Policies is also included
in Davis Advisors' Form ADV Part II.

GUIDING PRINCIPLES

Creating Value for Existing Shareholders. The most important factors that we
consider in evaluating proxy issues are: (i) the Company's or management's
long-term track record of creating value for shareholders. In general, we will
consider the recommendations of a management with a good record of creating
value for shareholders as more credible than the recommendations of managements
with a poor record; (ii) whether, in our estimation, the current proposal being
considered will significantly enhance or detract from long-term value for
existing shareholders; and (iii) whether a poor record of long term performance
resulted from poor management or from factors outside of managements control.

Other factors which we consider may include:

(a) Shareholder Oriented Management. One of the factors that Davis Advisors
considers in selecting stocks for investment is the presence of
shareholder-oriented management. In general, such managements will have a large
ownership stake in the company. They will also have a record of taking actions
and supporting policies designed to increase the value of the company's shares
and thereby enhance shareholder wealth. Davis Advisors' research analysts are
active in meeting with top management of portfolio companies and in discussing
their views on policies or actions which could enhance shareholder value.
Whether management

shows evidence of responding to reasonable shareholder suggestions, and
otherwise improving general corporate governance, is a factor which may be taken
into consideration in proxy voting.

(b) Allow responsible management teams to run the business. Because we try
generally to invest with "owner oriented" managements (see above), we vote with
the recommendation of management on most routine matters, unless circumstances
such as long standing poor performance or a change from our initial assessment
indicate otherwise. Examples include the election of directors and ratification
of auditors. Davis Advisors supports policies, plans and structures that give
management teams appropriate latitude to run the business in the way that is
most likely to maximize value for owners. Conversely, Davis Advisors opposes
proposals that limit management's ability to do this. Davis Advisors will
generally vote with management on shareholder social and environmental proposals
on the basis that their impact on share value is difficult to judge and is
therefore best done by management.

(c) Preserve and expand the power of shareholders in areas of corporate
governance. Equity shareholders are owners of the business, and company boards
and management teams are ultimately accountable to them. Davis Advisors supports
policies, plans and structures that promote accountability of the board and
management to owners, and align the interests of the board and management with
owners. Examples include: annual election of all board members, cumulative
voting, and incentive plans that are contingent on delivering value to
shareholders. Davis Advisors generally opposes proposals that reduce
accountability or misalign interests, including but not limited to classified
boards, poison pills, excessive option plans, and repricing of options.

Davis Advisors exercises its professional judgment in applying these principles
to specific proxy votes. Davis Advisors Proxy Procedures and Policies provides
additional explanation of the analysis which Davis Advisors may conduct when
applying these guiding principles to specific proxy votes.

CONFLICTS OF INTEREST

A potential conflict of interest arises when Davis Advisors has business
interests that may not be consistent with the best interests of its client. In
reviewing proxy issues to identify any potential material conflicts between
Davis Advisors' interests and those of its clients,

Davis Advisors' Proxy Oversight Group is charged with resolving material
potential conflicts of interest which it becomes aware of. It is charged with
resolving conflicts in a manner that is consistent with the best interests of
clients. There are many acceptable methods of resolving potential conflicts, and
the Proxy Oversight Group exercises its judgment and discretion to determine an
appropriate means of resolving a potential conflict in any given situation:

(1) Votes consistent with the "General Proxy Voting Policies," are presumed to
be consistent with the best interests of clients;
(2) Davis Advisors may disclose the conflict to the client and obtain the
client's consent prior to voting the proxy;
(3) Davis Advisors may obtain guidance from an independent third party;
(4) The potential conflict may be immaterial; or
(5) Other reasonable means of resolving potential conflicts of interest which
effectively insulate the decision on how to vote client proxies from the
conflict.

FORM N-1A

DAVIS NEW YORK VENTURE FUND, INC.

POST-EFFECTIVE AMENDMENT NO. 76 UNDER THE SECURITIES ACT OF 1933
REGISTRATION STATEMENT NO. 2-29858

AND

POST-EFFECTIVE AMENDMENT NO. 51 UNDER THE INVESTMENT COMPANY ACT OF 1940
REGISTRATION NO. 811-1701

PART C

OTHER INFORMATION
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Item 22. Exhibits:
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(a)(1) Articles of Incorporation. Amended and Restated
Articles of Incorporation of Davis New York
Venture Fund, Inc., incorporated by reference to
Exhibit (1) of Registrant's registration statement
2-29858, filed on Edgar April 4, 1996.

(a)(2) Articles of Amendment of Articles of
Incorporation, limiting liability of directors and
officers, effective October 20, 1988, incorporated
by reference to Exhibit 23(a)(2) of Registrant's
registration statement 2-29858, filed on Edgar
October 2, 2000.

(a)(3) Articles of Amendment, regarding stock
classification, net asset value calculation and
shareholder voting, dated August 29, 1994,
incorporated by reference to Exhibit 23(a)(3) of
Registrant's registration statement 2-29858, filed
on Edgar October 2, 2000.

(a)(4) Articles of Amendment, changing name from New York
Venture Fund, Inc., to Davis New York Venture
Fund, Inc., effective October 1, 1995,
incorporated by reference to Exhibit 23(a)(4) of
Registrant's registration statement 2-29858, filed
on Edgar October 2, 2000.

(a)(5) Articles Supplementary to Articles of
Incorporation, designating Davis Research Fund.
Incorporated by reference to Exhibit 23(a)(6) of
Registrant's registration statement 2-29858, filed
on Edgar September 21, 2001.

(a)(6) Articles Supplementary to Articles of
Incorporation, designating the Davis New York
Venture Fund Class R shares. Incorporated by
reference to Exhibit 23(a)(6) of Registrant's
registration statement 2-29858, filed on Edgar May
22, 2003.

(a)(7) Articles Supplementary to Articles of
Incorporation, designating Davis Global Fund.
Incorporated by reference to Exhibit 23(a)(7) of
Registrant's registration statement 2-29858, filed
on Edgar September 20, 2004.

(b) By-laws. Amended and Restated Bylaws (as of
October 6, 1998), incorporated by reference to
Exhibit (2) of Registrant's registration statement
2-29858, filed on Edgar December 1, 1998.

(d)(1) Investment Advisory Contracts. Investment Advisory
Agreement with Davis Selected Advisers, L.P.,
dated January 1, 2001, incorporated by reference
to Exhibit 23(d)(1) of Registrant's registration
statement 2-29858, filed on Edgar November 30,
2000.

(d)(2) Sub-Advisory Agreement between Davis Selected
Advisers, L.P., and Davis Selected Advisers - NY,
Inc., dated January 1, 2001, incorporated by
reference to Exhibit 23(d)(2) of Registrant's
registration statement 2-29858, filed on Edgar
November 30, 2000.

(d)(3) Amendment to Investment Advisory Agreement dated
June 12, 2001 adding Davis Research Fund,
incorporated by reference to Exhibit 23(d)(3) of
Registrant's registration statement 2-29858, filed
on Edgar August 6, 2001.

(d)(4) Amendment to Investment Advisory Agreement dated
September 14, 2004 adding Davis Global Fund.
Incorporated by reference to Exhibit 23(d)(4) of
Registrant's registration statement 2-29858, filed
on Edgar September 20, 2004.

(e)(1) Underwriting Contracts. Distributing Agreement
dated January 1, 2001 appointing Davis
Distributors, LLC as the Registrant's principal
underwriter. Incorporated by reference to Exhibit
23(e)(1) of Registrant's registration statement
2-29858, filed on Edgar September 21, 2001.

(e)(2) Form of Dealer Agreement between principal
underwriter and distributing broker-dealers,
incorporated by reference to Exhibit 23(e)(3) of
Registrant's registration statement 2-29858, filed
on Edgar October 2, 2000.

(f) Bonus or Profit Sharing Contracts. Not applicable.

(g)(1) Custodian Agreements. Custodian Contract,
dated September 5, 2000, incorporated by
reference to Exhibit 23(g)(1) of
Registrant's registration statement 2-29858,
filed on Edgar October 2, 2000.

(h)(1) Other Material Contracts. Transfer Agency
and Service Agreement, dated March 10, 1998,
incorporated by reference to Exhibit
23(h)(1) of Registrant's registration
statement 2-29858, filed on Edgar October 2,
2000.

(h)(2) Agreement to Waive Fees and Reimburse Expenses for
Davis Research Fund, incorporated by reference to
Exhibit 23(h)(3) to Registrant's Post-Effective
Amendment filed on Edgar October 23, 2001.

(h)(3) Agreement to Waive Fees and Reimburse Expenses for
Davis Global Fund. Incorporated by reference to
Exhibit 23(h)(3) of Registrant's registration
statement 2-29858, filed on Edgar September 20,
2004.

(i)* Legal Opinion. Opinion and Consent of Counsel,
Seyfarth Shaw LLP.

(j) Other Opinions. Consent of Auditors, KPMG LLP.

(k) Omitted Financial Statements. Incorporated from
the Annual Report.

(l) Initial Capital Agreements. Not applicable.

(m)(1) Rule 12b-1 Plan. Distribution Plans for Class A,
B, and C shares, as amended December 5, 2000,
incorporated by reference to Exhibit 23(m) of
Registrant's registration statement 2-29858, filed
on Edgar September 19, 2002.

(m)(2) Rule 12b-1 Plan. Distribution Plan for Class R
shares. Incorporated by reference to Exhibit
23(m)(2) of Registrant's registration statement
2-29858, filed on Edgar August 19, 2003.

(n) Rule 18f-3 Plan. Plan pursuant to Rule 18f-3, as
amended June 10, 2003 to add Class R shares.
Incorporated by reference to Exhibit 23(m)(2) of
Registrant's registration statement 2-29858, filed
on Edgar May 22, 2003.

(o) Reserved.

(p)(1) Code of Ethics. Code of Ethics as amended January
29, 2000, incorporated by reference to Exhibit (p)
of Registrant's registration statement 2-29858,
filed on Edgar October 2, 2000.

*(p)(2) Code of Ethics. Code of Ethics as amended February
1, 2005, filed herein.

(q)(1) Other Exhibits. Powers of Attorney of the
Registrant, Officers and Board of Directors of
Davis New York Venture Fund, Inc., dated January
11, 2001, appointing Arthur Don and Thomas Tays as
attorneys-in-fact, incorporated by reference to
Exhibit 23(q)(1) of Registrant's registration
statement 2-29858, filed on Edgar August 6, 2001.

(q)(2) Other Exhibits. Agreement Respecting Names,
changing name from New York Venture Fund, Inc., to
Davis New York Venture Fund, Inc., dated October
1, 1995, incorporated by reference to Exhibit
23(d)(2) of Registrant's registration statement
2-29858, filed on Edgar October 2, 2000.

(q)(3) Other Exhibits. Powers of Attorney of the
Registrant, Officers of Davis New York Venture
Fund, Inc. (Eich and Reed), dated September 13,
2002 appointing Arthur Don and Thomas Tays as
attorneys-in-fact, incorporated by reference to
Exhibit 23(q)(3) of Registrant's registration
statement 2-29858, filed on Edgar September 19,
2002.

(q)(4) Other Exhibits. Power of Robert Morgenthau, dated
December 3, 2002 appointing Arthur Don and Thomas
Tays as attorneys-in-fact; incorporated by
reference to Exhibit 23(q)(4) of Registrant's
registration statement 2-29858, filed on Edgar
November 28, 2003.

(q)(5) Other Exhibits. Power of Thomas Gayner, dated
April 19, 2004 appointing Arthur Don and Thomas
Tays as attorneys-in-fact. Incorporated by
reference to Exhibit 23(q)(5) of Registrant's
registration statement 2-29858, filed on Edgar
September 20, 2004.

(q)(6) Other Exhibits. Powers of Attorney of the
Registrant, Officers of Davis New York Venture
Fund, Inc. (Haines as PFO), dated September 14,
2004 appointing Arthur Don and Thomas Tays as
attorneys-in-fact. Incorporated by reference to
Exhibit 23(q)(6) of Registrant's registration
statement 2-29858, filed on Edgar September 20,
2004.

* filed herein.

Item 23. Persons Controlled by or Under Common Control With Registrant

Information pertaining to persons controlled by or under common control with
Registrant is incorporated by reference from the Statement of Additional
Information contained in Part B of this Registration Statement.

Item 24. Indemnification

Registrant's Articles of Incorporation indemnifies its directors, officers and
employees to the full extent permitted by Section 2-418 of the Maryland General
Corporation Law, subject only to the provisions of the Investment Company Act of
1940. The indemnification provisions of the Maryland General Corporation Law
(the "Law") permit, among other things, corporations to indemnify directors and
officers unless it is proved that the individual (1) acted in bad faith or with
active and deliberate dishonesty, (2) actually received an improper personal
benefit in money, property or services, or (3) in the case of a criminal
proceeding, had reasonable cause to believe that his act or omission was
unlawful. The Law was also amended to permit corporations to indemnify directors
and officers for amounts paid in settlement of stockholders' derivative suits.

In addition, the Registrant's directors and officers are covered under a policy
to indemnify them for loss (subject to certain deductibles) including costs of
defense incurred by reason of alleged errors or omissions, neglect or breach of
duty. The policy has a number of exclusions including alleged acts, errors, or
omissions which are finally adjudicated or established to be deliberate,
dishonest, malicious or fraudulent or to constitute willful misfeasance, bad
faith, gross negligence or reckless disregard of their duties in respect to any
registered investment company. This coverage is incidental to a general policy
carried by the Registrant's adviser.

In addition to the foregoing indemnification, Registrant's Articles of
Incorporation exculpate directors and officers with respect to monetary damages
except to the extent that an individual actually received an improper benefit in
money property or services or to the extent that a final adjudication finds that
the individual acted with active and deliberate dishonesty.

Item 25. Business and Other Connections of Investment Adviser

Davis Selected Advisers, L.P. ("DSA") and affiliated companies comprise a
financial services organization whose business consists primarily of providing
investment management services as the investment adviser and manager for
investment companies registered under the Investment Company Act of 1940,
unregistered domestic and off-shore investment companies, and as an investment
adviser to institutional and individual accounts. DSA also serves as sub-adviser
to other investment companies. Affiliated companies include:

Davis Investments, LLC: the sole general partner of DSA. Controlled by its sole
member, Christopher C. Davis.

Venture Advisers, Inc.: is a corporation whose primary purpose is to hold
limited partner units in DSA.

Davis Selected Advisers - NY, Inc.: a wholly-owned subsidiary of DSA, is a
federally registered investment adviser which serves as sub-adviser for may of
DSA's advisory clients.

Davis Distributors LLC: a wholly owned subsidiary of DSA, is a registered
broker-dealer which serves as primary underwriter of the Davis Funds and
Selected Funds.

Other business of a substantial nature that directors or officers of DSA are or
have been engaged in the last two years:

ANDREW A. DAVIS (6/25/63), 124 East Marcy Street, Santa Fe, NM 87501. Director
and President or Vice President of each of the Davis Funds and the Selected
Funds. President of Davis Investments, LLC. Also serves as a director and/or
senior officer for several companies affiliated with DSA which are described
above.

CHRISTOPHER C. DAVIS (7/13/65), 609 Fifth Avenue, New York, NY 10017. Director
and Chief Executive Officer, President, and/or Vice President of each of the
Davis Funds and the Selected Funds; Director, Chairman and Chief Executive
Officer of Davis Investments, LLC. Also serves as a director and/or senior
officer for several companies affiliated with DSA, which are described above. Is
an employee of Shelby Cullom Davis & Co., a registered broker/dealer.

KENNETH C. EICH (8/14/53), 2949 East Elvira Road, Suite 101, Tucson, AZ 85706.
Executive Vice President and Principal Executive Officer of each of the Davis
Funds and Selected Funds; Chief Operating Officer of Davis Investments, LLC.
Also serves as a senior officer for several companies affiliated with DSA which
are described above.

DOUGLAS HAINES (3/4/71) 2949 East Elvira Road, Suite 101, Tucson, AZ 85706. Vice
President, Treasurer Chief Financial Officer, Principal Financial Officer, and
Principal Accounting Officer of each of the Davis Funds and Selected Funds.

SHARRA L. REED (9/25/66) 2949 East Elvira Road, Suite 101, Tucson, AZ 85706.
Vice President Chief Compliance Officer of each of the Davis Funds and Selected
Funds; Vice President of Davis Investments, LLC. Also serves as a senior officer
for several companies affiliated with DSA which are described above.

THOMAS D. TAYS (3/7/57) 2949 East Elvira Road, Suite 101, Tucson, AZ 85706. Vice
President, Chief Legal Officer and Secretary, Davis Investments, LLC. Also
serves as a senior officer for several companies affiliated with DSA which are
described above.

GARY TYC (05/27/56), 2949 East Elvira Road, Suite 101, Tucson, AZ 85706. Vice
President, Chief Financial Officer Treasurer, and Assistant Secretary of Davis
Investments, LLC. Also serves as a senior officer for several companies
affiliated with DSA which are described above.

RUSSELL O. WIESE (05/18/66) 609 Fifth Avenue, New York, NY 10017. Chief
Marketing Officer of Davis Investments, LLC. Also serves as a director and/or
senior officer for several companies affiliated with DSA which are described
above.

Item 26. Principal Underwriter

(a) Davis Distributors, LLC, a wholly owned subsidiary of the Adviser,
located at 2949 East Elvira Road, Suite 101, Tucson, AZ 85706, is the
principal underwriter for each of the Davis Funds and Selected Funds: Davis
New York Venture Fund Inc., Davis Series, Inc., Davis Variable Account Fund,
Inc., Davis International Series, Inc., Selected American Shares, Inc.,
Selected Special Shares, Inc., and Selected Capital Preservation Trust.

(b) Management of the Principal Underwriter:

NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
---------------- ---------------- ---------------

Kenneth C. Eich President Executive Vice President and
2949 East Elvira Road, Suite Principal Executive Officer
101
Tucson, AZ 85706
Russell Wiese Chief Marketing Officer None
609 Fifth Avenue,
New York, NY 10017.

Gary P. Tyc Vice President, Treasurer and None
2949 East Elvira Road, Suite 101 Assistant Secretary
Tucson, AZ 85706
Anthony Frazia Chief Compliance Officer None
609 Fifth Avenue,
New York, NY 10017.

Thomas D. Tays Vice President and Secretary Vice President and Secretary
2949 East Elvira Road, Suite 101
Tucson, AZ 85706

Item 27. Location of Accounts and Records

Accounts and records are maintained at the offices of Davis Selected Advisers,
L.P., 2949 East Elvira Road, Suite 101, Tucson, Arizona 85706, and at the
offices of the Registrant's custodian, State Street Bank and Trust Company, One
Heritage Drive, North Quincy, Massachusetts 02107, and the Registrant's transfer
agent State Street Bank and Trust, c/o Service Agent, BFDS, Two Heritage Drive,
Seventh Floor, North Quincy, Massachusetts 02107.

Item 28. Management Services

Not applicable

Item 29. Undertakings

Registrant undertakes to furnish each person to whom a prospectus is delivered
with a copy of Registrant's latest annual report to shareholders upon request
and without charge.

DAVIS NEW YORK VENTURE FUND, INC.

SIGNATURES
----------

Pursuant to the requirements of the Securities Act of 1933 and/or the Investment
Company Act of 1940, the Registrant has caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Tucson and State of Arizona on the 21st day of December, 2004.

The Registrant hereby certifies that this Post Effective Amendment meets all the
requirements for effectiveness under paragraph (b) of Rule 485 of the Securities
Act of 1933.

DAVIS NEW YORK VENTURE FUND, INC.

*By: /s/ Thomas Tays
--------------------
Thomas Tays
Attorney-in-Fact

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities
indicated.

Signature Title Date
--------- ----- ----

Kenneth C. Eich* Principal Executive Officer December 21, 2004
----------------
Kenneth C. Eich

Douglas Haines* Principal Financial Officer
--------------- and Principal Accounting Officer December 21, 2004
Douglas Haines

*By: /s/ Thomas Tays
--------------------
Thomas Tays
Attorney-in-Fact

*Thomas Tays signs this document on behalf of the Registrant and each of the
foregoing officers pursuant to the power of attorney filed as Exhibits 22(q)(1),
22(q)(3), and 22(q)(6) of Registrant's registration statement 2-29858.

/s/ Thomas Tays
---------------
Thomas Tays
Attorney-in-Fact

DAVIS NEW YORK VENTURE FUND, INC.

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed on December 12, 2004, by the following persons in the
capacities indicated.

Signature Title
--------- -----

Wesley E. Bass. Jr.* Director
---------------------------------
Wesley E. Bass, Jr.

Jeremy H. Biggs* Director
---------------------------------
Jeremy H. Biggs

Marc P. Blum* Director
---------------------------------
Marc P. Blum

Andrew A. Davis* Director
---------------------------------
Andrew A. Davis

Christopher C. Davis* Director
---------------------------------
Christopher C. Davis

Thomas. Gayner* Director
---------------------------------
Thomas Gayner

Jerry D. Geist* Director
-----------------------------
Jerry D. Geist

D. James Guzy* Director
------------------------------
D. James Guzy

G. Bernard Hamilton* Director
--------------------------
G. Bernard Hamilton

Robert P. Morgenthau* Director
----------------------------
Robert P. Morgenthau

Theodore B. Smith, Jr.* Director
---------------------------
Theodore B. Smith, Jr.

Christian R. Sonne* Director
------------------------------
Christian R. Sonne

Marsha Williams* Director
------------------------------
Marsha Williams

* Thomas Tays signs this document on behalf of each of the foregoing persons
pursuant to the powers of attorney filed as Exhibits 22(q)(1), 22(q)(4), and
22(q)(5) of Registrant's registration statement 2-29858.

/s/ Thomas Tays
----------------------
Thomas Tays
Attorney-in-Fact

EXHIBIT LIST

23. (i) Legal Opinion. Opinion and Consent of Counsel, Seyfarth Shaw LLP

23. (p)(2) Code of Ethics as amended February 1, 2005