The Fund offers an opportunity to participate in the long-term growth potential of real estate through an investment in a mutual fund which is professionally managed, convenient, and liquid. As a result, REITs tend to pay high dividends. A REIT can raise or lower its dividend as the underlying rental income increases or decreases. The Fund may invest in companies that own apartment complexes, office buildings, shopping malls, industrial parks and hotels across the country. The diversification among property type, geographic region and property managers is possible through the Fund's ownership of many individual REITs.
Diversification tends to reduce investment risk.
Potential Inflation Hedge REITs can appreciate in value during periods of inflation and economic strength, as underlying property values, occupancy levels and rental rates may rise. Davis Real Estate Fund concentrates its investments in the real estate sector, and it may be subject to greater risks than a fund that does not concentrate its investments in a particular sector. The Fund's investment performance, both good and bad, is expected to reflect the economic performance of the real estate sector much more than a fund that does not concentrate its portfolio. Davis Real Estate Fund is allowed under its charter to focus its investments in fewer companies, and it may be subject to greater risks than a more diversified fund that is not allowed to focus its investments in a few companies. Should the portfolio manager determine that it is prudent to focus the Fund's portfolio in a few companies, the Fund's investment performance, both good and bad, is expected to reflect the economic performance of its more focused portfolio.