Davis NY Venture Fund Strong Results in 2025

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Chris Davis: Today I'm pleased to give you a short report and update on our flagship mutual fund, the Davis New York Venture Fund, which is more than 50 years old.

We've outperformed the Russell 1000 Value, not just in 2025, but in the 3, 5, 7 and indeed in all periods shown here.

And we're proud of that record. Now there we show our results relative to the Russell 1000 value, we want to be clear.

We also have some ground to make up relative to the S&P 500 in some periods, but that's the result of a deliberate choice to avoid some of the bubble and mania areas, areas that have been so central to the returns of the S&P in recent periods.

Now we've achieved our results without that massive overweight in a number of the "market darlings" and the "Mag 7."

So we're getting a lot of interest from advisors because we've been able to outperform the
value indexes, but not have this massive overweight in some of these bubble areas.

So let's take a closer look at how we delivered these results. I won't spend much time reminding you of the core tenets of our approach, but just bear in mind that we are managed by an experienced team with a highly selective, truly active managed portfolio.

It's a time-tested, relative value approach, not deep value, not go-go growth. There's a focus on quality and durability in everything we do.

And of course, we never forget the key importance of an alignment of interest. Our family, my colleagues, our partners, we are among the largest investors in the Davis, New York Venture Fund.

So let's talk about some of the specific drivers.

If we look back at 2025, financials is a sector had a good year, but our financials did significantly better because we're highly selective.

We're focused on competitively advantaged companies that still have a lot of runway to go. We think of these as compounding machines.

Capital One, Wells Fargo, Markel. Now, in areas that have been in the spotlight, the dominant tech companies, again, selectivity is the key word.

Within the ones that are most well-known, our focus is on those companies that have entrenched base of customers and those companies that have huge, resilient cash flow that enables them to make significant investments without putting the firm at risk, and of course those companies that are run by proven leaders that have a record of navigating the shifting sands of technology disruption. So think of Google, Amazon, and maybe Meta as good examples.

But within this sector, we're also focused on the providers of picks and shovels to this "AI Gold Rush." So here, think of Texas Instruments, think of Applied Materials, think of Samsung as good examples.

Now, outside of those areas, we have opportunistic investments in healthcare. We avoid the fad companies with the hot products. We know that today's hot product goes off patent and there's an enormous back well to fill.

Instead, we focus on service providers. So CVS was a big contributor to recent results, but we also were opportunistically buying United Health at a time when it was deeply out of favor.

And then we own some resilient healthcare names, think of companies like Solventum or Viatris, again out of the spotlight, but we think quiet compounding machines.

Now when we think of our positioning looking forward, we also are interested in owning companies that are a little bit more out of the spotlight in building them when there's not a lot of attention on the sector. 

So, today, think a lot about companies in the energy sector, in the materials sector. So, we've added to companies like Coterra or Conoco. 

We have holdings in copper companies like Teck Resources. So, that gradual move into the parts of the market that are out of favor give us a sense of a lot of resilience.

And finally, I want to talk a little bit about industrial companies. You know, Jeff Bezos said, in times of change, sometimes the most important question is, what is not changing? 

Here, think of companies like Tyson Foods or MGM as examples.

Now, if I wanted to leave you with a single piece of data that gives you a sense of our conviction of why we are so well-positioned looking forward, it would be the data shown here.

By being highly selective, owning fewer, you know, let's say, between 40 and 50 companies out of the 500 or 1000 in the indexes, we've been able to identify a portfolio of companies that have a record of durable growth.

So that is a record of growth that we're very proud of. And yet the valuation discipline remains the cornerstone of our approach. Look here at our P/E.

So that combination of attractive growth at low valuations is what gives us so much optimism as we look ahead to 2026 and beyond.

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