The Davis Convertible Securities Fund is designed for an investor who wants the growth potential of stocks with the income of bonds. The Fund offers an opportunity to participate in the appreciation potential of either the convertible security's underlying stock or bond value.
Convertibles are securities that contain both equity and fixed income characteristics.
Like fixed income securities, convertibles are designed to pay a fixed rate of income. Convertibles usually provide higher yields than common stocks and greater appreciation potential than bonds. Convertibles can be exchanged for stock and therefore can benefit from price increases in the underlying stock. A favorable balance between upside potential and downside protection. The Fund's portfolio manager seeks convertible securities which tend to increase more than decline, given an equal upward or downward move in the price of the underlying stock.