Global Fund

The average annual total returns for Davis Global Fund’s Class A shares for periods ending December 31, 2025, including a maximum 4.75% sales charge, are: 1 year, 25.63%; 5 years, 7.43%; and 10 years, 10.44%. The performance presented represents past performance and is not a guarantee of future results. Total return assumes reinvestment of dividends and capital gain distributions. Investment return and principal value will vary so that, when redeemed, an investor’s shares may be worth more or less than their original cost. For most recent month-end performance, Click here or call 800-279-0279. Current performance may be lower or higher than the performance quoted. The total annual operating expense ratio for Class A shares as of the most recent prospectus was 0.95%. The total annual operating expense ratio may vary in future years. Returns and expenses for other classes of shares will vary.

This material includes candid statements and observations regarding investment strategies, individual securities, and economic and market conditions; however, there is no guarantee that these statements, opinions or forecasts will prove to be correct. All fund performance discussed within this material refers to Class A shares without a sales charge and are as of December 31, 2025, unless otherwise noted. This is not a recommendation to buy, sell or hold any specific security. Past performance is not a guarantee of future results. The Attractive Growth and Undervalued reference in this material relates to underlying characteristics of the portfolio holdings. There is no guarantee that the Fund performance will be positive as equity markets are volatile and an investor may lose money.

Performance:
Power of Active Share

Davis Global Fund (DGF) posted a strong return of +31.89% in 2025, outperforming the +22.34% return of the MSCI ACWI benchmark by almost 1,000 points. The fund has outperformed the index on an annualized basis since its inception in 2004.

In this report we discuss the factors behind our performance as well as the contributors and detractors to those results. We go through some of the capital allocation decisions we have made and explain where we are seeing opportunities in the world.

In general, we are very optimistic about the outlook for the portfolio. The three pillars of our optimism are outlined below—namely, our selectivity, and the high earnings growth potential of our portfolio companies together with their relatively low valuations compared to the index.

The fund’s portfolio holds only 38 names compared with more than 2,500 for the index. This means we are extremely selective. As a result, our portfolio has a much higher five-year average earnings per share growth rate than the index and yet is trading at a meaningful discount to the index on a forward price/earnings basis. We think this combination of higher growth and lower valuation bodes very well for future absolute and relative performance.

Among the factors driving our results in 2025 was strong performance by several of our technology holdings, including Samsung, AppLovin, Prosus (which owns Tencent), NetEase, Applied Materials and Alphabet (formerly Google). We also saw strength among the select financials that we own, including Danske Bank, Capital One and Ping An Insurance. Our healthcare names performed well too, especially CVS Group, which had a very strong year overall.

Among detractors from performance was Meituan, the Chinese food delivery company, where increased competition hurt results. Pinterest was also a detractor in the short period that we owned it after initiating a position late in the year.

Regarding capital allocation decisions, we made several valuation trims where we felt the margin of safety had narrowed due to strong performance. In technology, we trimmed our positions in Meta, Amazon and Samsung, all names that have continued to be very strong. We allocated capital to new buys, including AppLovin, which is one of the leaders in delivering ads for mobile gaming, a growing sector. We also started a position in Pinterest, as mentioned.

In financials, also due to valuation, we trimmed Capital One, Danske Bank and Berkshire Hathaway.

In healthcare we saw a great opportunity to add UnitedHealth, which is a name we owned in the past but had sold on valuation. During 2025 the stock fell 40% in just a single month, so we started a new position in it. We also sold out of our holdings in Quest Diagnostics and Humana.

In industrials and materials, we added Aumovio, a German car parts manufacturer, and JBS, a Brazilian meat processor. Aumovio, though not well-known, is an interesting company that was recently spun off from its parent, Continental. Spinoffs can be a promising area for low valuation buys. We also added to our positions in Full Truck Alliance, a digital platform that connects shippers and truckers in China, and U.S. food manufacturer Tyson Foods.

Finally, we initiated some new positions in the energy commodity space, including Coterra which owns oil and natural gas interests in the Permian Basin in Texas and natural gas interests in the Marcellus Shale in Pennsylvania. We trimmed our holding in Teck Resources, a global leader in copper production, due to its very strong performance in 2025.

We explained previously how different our portfolio is from the benchmark in terms of its selectivity, earnings growth profile and valuation. As a result of our active selection process, it also differs from the index in other key respects.

Country weightings are an example. Our single largest country weighting is the U.S. but we are underweight the U.S. relative to the index and relative to the U.S.’ share of global stock market capitalization. The U.S. today represents almost two-thirds of the global index because of its elevated equity market valuations. As a result, we have pivoted slightly away and repurposed some of our U.S. exposures into non-U.S. names, including in China where we are significantly overweight. Valuations are much lower there and we are seeing some very good opportunities in China.

Our sector weightings are also quite different from the index. We are overweight in consumer discretionary, financials and energy and very underweight in technology, partly because of our deliberately limited exposure to the Mag 7 group of technology names, which are among the top 10 stocks in the S&P 500 Index by market capitalization.

As a result, our individual holdings look very different than the index, and our active share—which measures the degree of difference between a portfolio's holdings and those of its benchmark index—is very high at 91%.

Investment Landscape:
Global Opportunity Set

Looking at today’s investment landscape, we are seeing selective opportunities across the major regions that we invest in.

The U.S. economy remains the most dynamic in the world and as a result, produces many innovative global leaders, of which we own several. However, valuations in the U.S. market are elevated and the market is top-heavy and highly concentrated. As a result, in the U.S. we are looking beyond the most expensive stocks and finding very specific opportunities in healthcare, industrial, financial and select technology names. At the same time, we are aware of the economic risks in the U.S., including the level of national debt, the fiscal deficit and the continuing risk of inflation, and are monitoring these factors closely.

In Europe we see many excellent multinational companies but also a region with structural headwinds, whether regulatory, demographic or cultural (for example, an aversion to risk-taking). Those obstacles have historically led to less innovation and lower growth than in the U.S. In fact, one of the major risks we are monitoring in Europe is the extent to which these trends will persist and continue to suppress growth and innovation.

Turning to Asia, as mentioned we are significantly overweight China. Outside the U.S., this is one of the most dynamic economies in the world with many competitive and tech-forward companies that we consider attractive and well-run. We are impressed by the major advancements that are coming out of China. In renewable energy, for example, some 80% of the world’s solar panels and 70% of its wind turbines are made in China. The country today has the world's largest electric vehicle market and is home to the world’s biggest EV manufacturer. Its economy has tremendous innovation and dynamism, yet Chinese companies are trading at very attractive valuations, hence our overweight in the country. There are risks, with the chief concern probably being geopolitical, and this is something we are watching closely.

Among our investments in China are consumer facing internet companies that we consider innovative leaders. We have a position in Tencent, the largest video game company in the world now and a leader in messaging and social media within China. We own this through holding company Prosus, which is listed in Europe. We are invested in NetEase, the second largest video game company in China. We also own Meituan, the food delivery company, and DiDi, the ride-sharing leader in China with about 70% of the market.

Another major area of focus in China is life insurance. This is an interesting space. It is under the radar now, but we believe it is due for powerful long-term secular growth over the next decade or more as Chinese households pivot away from investing savings in property and direct them towards insurance products. We have a position in Ping An Insurance, the second largest insurance company in China. We also hold AIA, a Pan-Asian life insurer that has been in business for over a century.

Any discussion of investment opportunities needs to address AI. We look at this theme or segment through a value investors lens, which means we look for opportunities where the risk-reward is very positive. For example, one way that we approach investing in AI is to identify where the bottlenecks are. These areas include power generation, chip-making equipment and memory chips themselves. In terms of power, we have looked at natural gas as the main source of energy to power data centers and, as a result, own Tourmaline, a major Canadian natural gas company, and Coterra, which owns natural gas interests in the Marcellus Shale. We own Applied Materials, a leader in chip-making equipment. We also own Samsung, a major manufacturer of memory chips. It was trading at a very low valuation last year, and we managed to build a large position. This year, as the market has recognized the importance of high bandwidth memory, Samsung’s stock has done very well.

On the same theme we also look for companies with huge user bases that can apply AI and reap its rewards—for example, Meta, Amazon and Alphabet. Meta, to name one, has 3.5 billion daily users, which means half the world's population is using a Meta product daily. Meta is a major potential beneficiary of the use of AI, as are Alphabet and Amazon.

Finally, healthcare is also an area of great interest to us, and one where we have been spending a lot of time. In this group we own Viatris, a large manufacturer of generic pharmaceuticals, and CVS Group, a diversified healthcare major, both U.S.-based.

Putting it all together, we believe the fund’s structural characteristics are compelling—specifically, the selectivity of our investment process coupled with the fact that our portfolio companies have a materially higher earnings growth rate than the index average while trading at a meaningful discount to it.

This underpins why we are so optimistic about our prospects going forward.

Together on This Journey

For more than 50 years, Davis Advisors has navigated a constantly changing investment landscape guided by one North Star: to grow the value of the funds entrusted to us. We are pleased to have achieved strong results thus far and look forward to the decades ahead. With more than $2 billion of our own money invested in our portfolios, we stand shoulder to shoulder with our clients on this long journey.² We are grateful for your trust and are well-positioned for the future.