SEQUOIA FUND, INC.
ILLUSTRATION OF AN ASSUMED INVESTMENT OF $10,000
With Income Dividends Reinvested and Capital Gains
Distributions Accepted in Shares
The table below covers the period from July 15, 1970 (the date Fund shares were first offered to the public) to June 30, 2006. This period was one of widely fluctuating common stock prices. The results shown should not be considered as a representation of the dividend income or capital gain or loss which may be realized from an investment made in the Fund today.
| PERIOD ENDED: | Value of Initial $10,000 Investment |
Value of Cumulative Capital Gains Distributions |
Value of Cumulative Reinvested Dividends |
Total Value of Shares |
||||
| July 15, 1970 | $10,000 | $— | $— | $10,000 | ||||
| May 31, 1971 | 11,750 | — | 184 | 11,934 | ||||
| May 31, 1972 | 12,350 | 706 | 451 | 13,507 | ||||
| May 31, 1973 | 9,540 | 1,118 | 584 | 11,242 | ||||
| May 31, 1974 | 7,530 | 1,696 | 787 | 10,013 | ||||
| May 31, 1975 | 9,490 | 2,137 | 1,698 | 13,325 | ||||
| May 31, 1976 | 12,030 | 2,709 | 2,654 | 17,393 | ||||
| May 31, 1977 | 15,400 | 3,468 | 3,958 | 22,826 | ||||
| Dec. 31, 1977 | 18,420 | 4,617 | 5,020 | 28,057 | ||||
| Dec. 31, 1978 | 22,270 | 5,872 | 6,629 | 34,771 | ||||
| Dec. 31, 1979 | 24,300 | 6,481 | 8,180 | 38,961 | ||||
| Dec. 31, 1980 | 25,040 | 8,848 | 10,006 | 43,894 | ||||
| Dec. 31, 1981 | 27,170 | 13,140 | 13,019 | 53,329 | ||||
| Dec. 31, 1982 | 31,960 | 18,450 | 19,510 | 69,920 | ||||
| Dec. 31, 1983 | 37,110 | 24,919 | 26,986 | 89,015 | ||||
| Dec. 31, 1984 | 39,260 | 33,627 | 32,594 | 105,481 | ||||
| Dec. 31, 1985 | 44,010 | 49,611 | 41,354 | 134,975 | ||||
| Dec. 31, 1986 | 39,290 | 71,954 | 41,783 | 153,027 | ||||
| Dec. 31, 1987 | 38,430 | 76,911 | 49,020 | 164,361 | ||||
| Dec. 31, 1988 | 38,810 | 87,760 | 55,946 | 182,516 | ||||
| Dec. 31, 1989 | 46,860 | 112,979 | 73,614 | 233,453 | ||||
| Dec. 31, 1990 | 41,940 | 110,013 | 72,633 | 224,586 | ||||
| Dec. 31, 1991 | 53,310 | 160,835 | 100,281 | 314,426 | ||||
| Dec. 31, 1992 | 56,660 | 174,775 | 112,428 | 343,863 | ||||
| Dec. 31, 1993 | 54,840 | 213,397 | 112,682 | 380,919 | ||||
| Dec. 31, 1994 | 55,590 | 220,943 | 117,100 | 393,633 | ||||
| Dec. 31, 1995 | 78,130 | 311,266 | 167,129 | 556,525 | ||||
| Dec. 31, 1996 | 88,440 | 397,099 | 191,967 | 677,506 | ||||
| Dec. 31, 1997 | 125,630 | 570,917 | 273,653 | 970,200 | ||||
| Dec. 31, 1998 | 160,700 | 798,314 | 353,183 | 1,312,197 | ||||
| Dec. 31, 1999 | 127,270 | 680,866 | 286,989 | 1,095,125 | ||||
| Dec. 31, 2000 | 122,090 | 903,255 | 289,505 | 1,314,850 | ||||
| Dec. 31, 2001 | 130,240 | 1,002,955 | 319,980 | 1,453,175 | ||||
| Dec. 31, 2002 | 126,630 | 976,920 | 311,226 | 1,414,776 | ||||
| Dec. 31, 2003 | 147,610 | 1,146,523 | 362,790 | 1,656,923 | ||||
| Dec. 31, 2004 | 154,270 | 1,200,687 | 379,159 | 1,734,116 | ||||
| Dec. 31, 2005 | 155,450 | 1,331,529 | 382,059 | 1,869,038 | ||||
| June 30, 2006 | 156,610 | 1,342,080 | 384,909 | 1,883,599 |
The total amount of capital gains distributions accepted in shares was $744,707, the total amount of dividends reinvested was $116,740.
No adjustment has been made for any taxes payable by shareholders on capital gain distributions and dividends reinvested in shares.
Dear Shareholder:
Sequoia Fund's results for the second quarter of 2006 are shown below with comparable results for the leading market indexes:
| To June 30, 2006 | Sequoia Fund |
Dow Jones Industrials |
Standard & Poor's 500 |
|||
| 3 Months | -1.82% | 0.94% | -1.44% | |||
| 6 Months | 0.78% | 5.22% | 2.71% | |||
| 1 Year | 9.23% | 11.09% | 8.63% | |||
| 5 Years (Annualized) | 6.72% | 3.44% | 2.49% | |||
| 10 Years (Annualized) | 12.37% | 9.11% | 8.31% |
The performance shown above represents past performance and does not guarantee future results. Current performance may be lower or higher than the performance information shown.
The S&P 500 Index is an unmanaged, capitalization-weighted index of the common stocks of 500 major US corporations. The Dow Jones Industrial Average is an unmanaged, price-weighted index of 30 actively traded blue chip stocks. The performance data quoted represents past performance and assumes reinvestment of dividends. 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. Year to date performance as of the most recent month end can be obtained by calling DST Systems, Inc. at (800) 686-6884.
Enclosed is a copy of the transcript of our 2006 Annual Investor Day which was held on May 19th.
Currently, capital gains realized year to date are approximately $8.00 per share. The actual capital gains distribution in December will vary from this figure depending on investment activity. We will update this information in subsequent quarterly reports.
Sincerely,
Richard T. Cunniff |
Robert D. Goldfarb |
David M. Poppe |
August 16, 2006
Shareholder Expense Example
As a shareholder of the Fund, you incur ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2006 to June 30, 2006).
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and will not help you determine the relative total costs of owning different funds.
| Beginning Account Value January 1, 2006 |
Ending Account Value June 30, 2006 |
Expenses Paid During Period* January 1, 2006 to June 30, 2006 |
||||
| Actual | $1,000 |
$1,007.80 |
$4.98 |
|||
| Hypothetical (5% return per year before expenses) |
$1,000 |
$1,019.84 |
$5.01 |
* Expenses are equal to the Fund's annualized expense ratio of 1.00%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
The table below shows the changes of the Fund's major positions for the period ended June 30, 2006:
| Position | % of assets 6/30/2006 |
% of assets 12/31/2005 |
||||
| Berkshire Hathaway | 32.8% |
33.8% |
||||
| Progressive Corp. | 15.7% |
17.4% |
||||
| TJX Companies Inc. | 7.5% |
7.4% |
||||
| Mohawk Industries | 6.6% |
8.0% |
||||
| Expeditors International | 4.8% |
3.4% |
||||
| Fastenal Company | 4.7% |
4.4% |
||||
| |
|
|||||
| Top six positions | 72.1% |
74.4% |
||||
| |
| COMMON STOCKS (93.79%) | ||||
| Shares | Value (Note 1) |
|||
| AUTO AND HOME SUPPLY STORES (1.52%) | ||||
| 1,699,801 | O'Reilly Automotive Inc.* | $53,016,793 | ||
| CASUALTY INSURANCE (15.70%) | ||||
| 21,238,148 | Progressive Corporation | 546,032,785 | ||
| CHEMICAL DIAGNOSTIC SUBSTANCES (3.30%) | ||||
| 1,528,838 | IDEXX Laboratories Inc.* | 114,861,599 | ||
| DIVERSIFIED COMPANIES (32.81%) | ||||
| 12,436 | Berkshire Hathaway Inc. Class A* | 1,139,871,324 | ||
| 239 | Berkshire Hathaway Inc. Class B* | 727,277 | ||
| 1,140,598,601 | ||||
| ELECTRONIC COMPUTER MANUFACTURING (2.35%) | ||||
| 2,149,440 | International Game Technology | 81,549,754 | ||
| FINANCE (0.52%) | ||||
| 376,400 | MasterCard Inc.* | 18,067,200 | ||
| FREIGHT TRANSPORTATION (4.83%) | ||||
| 2,997,808 | Expeditors International of Washington, Inc. | 167,907,226 | ||
| INDUSTRIAL & CONSTRUCTION SUPPLIES (4.70%) | ||||
| 4,053,871 | Fastenal Company | 163,330,463 | ||
| INSURANCE AGENTS & BROKERS (2.43%) | ||||
| 2,888,617 | Brown & Brown Inc. | 84,405,389 | ||
| MEDICIAL & HOSPITAL EQUIPMENT (0.12%) | ||||
| 120,083 | Patterson Companies Inc.* | 4,194,499 | ||
| PROCESS CONTROL INSTRUMENTS (0.71%) | ||||
| 384,112 | Danaher Corporation | 24,706,084 | ||
| RETAILING (18.18%) | ||||
| 1,510,600 | Bed Bath & Beyond Inc.* | 50,106,602 | ||
| 39,799 | Costco Wholesale Corporation | 2,273,717 | ||
| 1,471,866 | Target Corporation | 71,930,091 | ||
| 1,145,642 | Tiffany & Company | 37,829,099 | ||
| 11,411,433 | TJX Companies, Inc. | 260,865,358 | ||
| 2,359,150 | Wal-Mart Stores Inc. | 113,640,255 | ||
| 2,119,845 | Walgreen Company | 95,053,850 | ||
| 631,698,972 | ||||
| TEXTILE – CARPETS (6.62%) | ||||
| 3,274,126 | Mohawk Industries, Inc. * | $230,334,764 | ||
| TOTAL COMMON STOCKS ($1,131,955,424) | $3,260,704,129 | |||
| PREFERRED STOCKS (2.64%) | ||||
| AUTOMOTIVE MANUFACTURING (2.64%) | ||||
95,034 |
Porsche AG – Preferred (Germany) | 91,855,493 |
||
| TOTAL PREFERRED STOCKS ($67,935,480) | 91,855,493 |
|||
| Principal Amount |
||||
| U.S. GOVERNMENT OBLIGATIONS (3.57%) | ||||
| $125,000,000 | U.S. Treasury Bills due 08/03/06 through 08/24/06 | 124,263,813 | ||
| TOTAL U.S. GOVERNMENT
OBLIGATIONS (Cost $124,263,813) |
124,263,813 | |||
| TOTAL INVESTMENTS (100%)†† (Cost $1,324,154,717) |
$3,476,823,435 | |||
| |
||||
| †† | The cost for federal income tax purposes is identical. |
| * | Non-income producing. |
The accompanying notes form an integral part of these Financial Statements
| ASSETS: | ||
| Investments in securities, at value (cost $1,324,154,717) (Note 1) | $3,476,823,435 | |
| Cash on deposit with custodian | 5,321,324 | |
| Receivable for capital stock sold | 791,527 | |
| Receivable for investment securities sold | 13,526,164 | |
| Dividends receivable | 390,926 | |
| Other assets | 28,344 | |
| Total assets | 3,496,881,720 | |
| LIABILITIES: | ||
| Payable for capital stock repurchased | 146,070 | |
| Payable for investment securities purchased | 15,396,124 | |
| Accrued investment advisory fee | 2,952,165 | |
| Accrued other expenses | 220,946 | |
| Total liabilities | 18,715,305 | |
| Net assets applicable to 22,208,885 shares of capital stock outstanding (Note 4) | $3,478,166,415 | |
| Net asset value, offering price and redemption price per share | $156.61 | |
The accompanying notes form an integral part of these Financial Statements.
| INVESTMENT INCOME: | ||
| Income: | ||
| Dividends (net of $121,180 foreign tax withheld) | $5,716,385 |
|
| Interest | 4,202,666 | |
| Other Income | 24,980 | |
| Total income | 9,944,031 | |
| Expenses: | ||
| Investment advisory fee (Note 2) | 17,695,670 | |
| Legal and auditing fees | 127,086 | |
| Stockholder servicing agent fees | 247,589 | |
| Custodian fees | 40,000 | |
| Directors fees and expenses (Note 6) | 138,691 | |
| Other | 155,431 | |
| Total expenses | 18,404,467 | |
| Less expenses reimbursed by Investment Adviser (Note 2) | 634,000 | |
| Net expenses | 17,770,467 | |
| Net investment (loss) | (7,826,436) | |
| REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS: | ||
| Realized gain/(loss) on: | ||
| Investments | 139,829,745 | |
| Foreign currency transactions | (5,174) |
|
| Net realized gain on investments and foreign currencies | 139,824,571 | |
| Net (decrease) in unrealized appreciation on: | ||
| Investments | (103,319,285) | |
| Net realized and unrealized gain on investments and foreign currencies | 36,505,286 | |
| Increase in net assets from operations | $28,678,850 | |
The accompanying notes form an integral part of these Financial Statements.
| Six Months Ended 6/30/06 (Unaudited) |
Year Ended 12/31/05 |
|||
| INCREASE/(DECREASE) IN NET ASSETS: | ||||
| From operations: | ||||
| Net investment (loss) | $(7,826,436) | $(17,228,982) | ||
| Net realized gain on investments and foreign Currencies | 139,824,571 | 378,898,763 | ||
| Net (decrease) in unrealized appreciation | (103,319,285) | (89,974,201) | ||
| Net increase in net assets from operations | 28,678,850 | 271,695,580 | ||
| Distributions to shareholders from: | ||||
| Net investment income | 0 | 0 | ||
| Net realized gains | (1,110,755) | (245,091,727) | ||
| Capital share transactions (Note 4) | (122,713,019) | (225,675,415) | ||
| Total (decrease) | (95,144,924) | (199,071,562) | ||
| NET ASSETS: | ||||
| Beginning of period | 3,573,311,339 | 3,772,382,901 | ||
| End of period | $3,478,166,415 | $3,573,311,339 | ||
| NET ASSETS CONSIST OF: | ||||
| Capital (par value and paid in surplus) | $1,242,306,269 | $1,316,344,778 | ||
| Undistributed net realized gains (Note 5) | 83,191,428 | 978,558 | ||
| Unrealized appreciation | 2,152,668,718 | 2,255,988,003 | ||
| Total Net Assets | $3,478,166,415 | $3,573,311,339 | ||
The accompanying notes form an integral part of these Financial Statements.
NOTE 1—SIGNIFICANT ACCOUNTING POLICIES:
Sequoia Fund, Inc. (the "Fund") is registered under the Investment Company Act of 1940, as amended, as a non-diversified, open-end management investment company. The investment objective of the Fund is growth of capital from investments primarily in common stocks and securities convertible into or exchangeable for common stock. The following is a summary of significant accounting policies, consistently followed by the Fund in the preparation of its financial statements.
| A. |
Valuation of investments: Investments are carried at market value or at fair value as determined by the Board of Directors. Securities traded on a national securities exchange or on a foreign exchange are valued at the last reported sales price on the principal exchange on which the security is listed on the last business day of the period; securities traded in the over-the-counter market are valued in accordance with NASDAQ Official Closing Price on the last business day of the period; listed securities and securities traded in the over-the-counter market for which no sale was reported on that date are valued at the mean between the last reported bid and asked prices; U.S. Treasury Bills with remaining maturities of 60 days or less are valued at their amortized cost. U.S. Treasury Bills that when purchased have a remaining maturity in excess of sixty days are stated at their discounted value based upon the mean between the bid and asked discount rates until the sixtieth day prior to maturity, at which point they are valued at amortized cost. |
| Foreign currencies: Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at the date of valuation. Purchases and sales of foreign portfolio securities are translated into U.S. dollars at the rates of exchange prevailing when such securities are acquired or sold. Income and expenses are translated into U.S. dollars at the rates of exchange prevailing when accrued. The fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments. Reported net realized foreign exchange gains or losses arise from the sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. |
|
| B. |
Accounting for investments: Investment transactions are accounted for on the trade date and dividend income is recorded on the ex-dividend date. Interest income is accrued as earned. Premiums and discounts on fixed income securities are amortized over the life of the respective security. The net realized gain or loss on security transactions is determined for accounting and tax purposes on the specific identification basis. |
| C. |
Federal income taxes: It is the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to its stockholders. Therefore, no federal income tax provision is required. |
| D. |
Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. |
| E. |
General: Dividends and distributions are recorded by the Fund on the ex-dividend date. |
NOTE 2—INVESTMENT ADVISORY CONTRACTS AND PAYMENTS TO INTERESTED PERSONS:
The Fund retains Ruane, Cunniff & Goldfarb Inc., as its investment adviser. Ruane, Cunniff & Goldfarb Inc. (the "Investment Adviser") provides the Fund with investment advice, administrative services and facilities.
Under the terms of the Advisory Agreement, the Investment Adviser receives a management fee equal to 1% per annum of the Fund's average daily net asset values. This percentage will not increase or decrease in relation to increases or decreases in the net asset value of the Fund. Under the Advisory Agreement, the Investment Adviser is obligated to reimburse the Fund for the amount, if any, by which the operating expenses of the Fund (including the management fee) in any year exceed the sum of 1 1/2% of the average daily net asset values of the Fund during such year up to a maximum of $30,000,000, plus 1% of the average daily net asset values in excess of $30,000,000. The expenses incurred by the Fund exceeded the percentage limitation during the six months ended June 30, 2006 and the Investment Adviser reimbursed the Fund $634,000.
For the six months ended June 30, 2006, there were no amounts accrued or paid to interested persons, including officers and directors, other than advisory fees of $17,695,670 to Ruane, Cunniff & Goldfarb Inc. and brokerage commissions of $194,044 to Ruane, Cunniff & Goldfarb LLC, an affiliate of the Investment Adviser. Certain officers of the Fund are also officers of the Investment Adviser and the Fund's distributor. Ruane, Cunniff & Goldfarb LLC, the Fund's distributor, received no compensation from the Fund on the sale of the Fund's capital shares during the six months ended June 30, 2006.
In October 2005, the Advisory Agreement was terminated as a result of its assignment due to the death of a control person of the Investment Adviser, under the provisions of the Advisory Agreement and as required by the 1940 Act. The Fund's Board of Directors approved an interim advisory contract between the Fund and the Investment Adviser with substantially identical terms of the Advisory Agreement. On December 12, 2005, the Board of Directors approved a new investment advisory contract between the Fund and the Investment Adviser effective March 1, 2006, subject to stockholder approval, with substantially identical terms of the Advisory Agreement. The new investment advisory contract was approved by stockholders at the February 24, 2006 stockholder meeting.
NOTE 3—PORTFOLIO TRANSACTIONS:
The aggregate cost of purchases and the proceeds from the sales of securities, excluding U.S. government obligations, for the six months ended June 30, 2006 were $148,546,200 and $233,663,272, respectively. Included in proceeds of sales is $62,854,735 representing the value of securities disposed of in payment of redemptions in-kind, resulting in realized gains of $54,264,838.
At June 30, 2006 the aggregate gross unrealized appreciation and depreciation of securities were $2,155,782,675 and $3,113,957, respectively.
NOTE 4—CAPITAL STOCK:
At June 30, 2006 there were 100,000,000 shares of $.10 par value capital stock authorized. Transactions in capital stock for the six months ended June 30, 2006 and the year ended December 31, 2005 were as follows:
| 2006 | 2005 | |||||||
| Shares | Amount | Shares | Amount | |||||
| Shares sold | 298,932 | $46,838,429 | 676,222 | $103,672,116 | ||||
| Shares issued to stockholders on reinvestment of: | ||||||||
| Net investment income | — | — | — | — | ||||
| Net realized gains on Investments | 5,628 | 877,923 | 1,281,840 | 198,753,650 | ||||
| 304,560 | 47,716,352 | 1,958,062 | 302,425,766 | |||||
| Shares repurchased | 1,082,015 | 170,429,371 | 3,424,141 | 528,101,181 | ||||
| Net (decrease) | (777,455) | $(122,713,019) | (1,466,079) | $(225,675,415) | ||||
NOTE 5—DISTRIBUTIONS TO SHAREHOLDERS:
Distributions to shareholders are determined in accordance with federal tax regulations and may differ from those determined for financial statement purposes. To the extent these differences are permanent such amounts are reclassified within the capital accounts based on federal tax regulations. During the six months ended June 30, 2006 permanent differences due to a net investment loss not deductible for tax purposes and realized gains on redemptions in kind not recognized for tax purposes resulted in a net decrease in net accumulated investment loss of $7,826,436 and undistributed net realized gains of $56,500,946 with a corresponding increase in paid in surplus of $48,674,510. These reclassifications had no effect on net assets.
The tax character of distributions paid during the six months ended June 30, 2006 and the year ended December 31, 2005 was as follows:
| 2006 | 2005 | |||
| Distributions paid from: | ||||
| Ordinary income | $— | $— | ||
| Long-term capital gains | 1,110,755 | 245,091,727 | ||
| Total distributions | $1,110,755 | $245,091,727 | ||
| |
||||
| As of June 30, 2006, the components of distributable earnings on a tax basis were as follows: | ||||
| Undistributed long-term gain | $83,191,428 |
|||
| Unrealized appreciation | 2,152,668,718 |
|||
$2,235,860,146 |
||||
NOTE 6—DIRECTORS FEES AND EXPENSES:
Directors who are not deemed "interested persons" receive fees of $6,000 per quarter and $2,500 for each meeting attended, and are reimbursed for travel and other out-of-pocket disbursements incurred in connection with attending directors meetings. The total of such fees and expenses paid by the Fund to these directors for the six months ended June 30, 2006 was $138,691.
NOTE 7—The interim financial statements have not been examined by the Fund's independent registered public accounting firm and accordingly they do not express an opinion thereon.
NOTE 8—FINANCIAL HIGHLIGHTS:
| Six
Months Ended June 30, |
Year
Ended December 31,
|
|||||||||||
| 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||
| |
|
|
|
|
|
|||||||
| Per Share Operating Performance (for a share outstanding throughout the period) | ||||||||||||
| Net asset value, beginning of Period | $155.45 | $154.27 | $147.61 | $126.63 | $130.24 | $122.09 | ||||||
| |
|
|
|
|||||||||
| Income from investment operations: | ||||||||||||
| Net investment income (loss) | (0.35) | (0.75) | (0.58) | (0.62) | (0.41) | 0.97 | ||||||
| Net realized and unrealized gains (losses) on investments | 1.56 | 12.57 | 7.45 | 22.21 | (3.03) | 11.52 | ||||||
| |
|
|
|
|||||||||
| Total from investment operations | 1.21 | 11.82 | 6.87 | 21.59 | (3.44) | 12.49 | ||||||
| |
|
|
|
|||||||||
| Less distributions: | ||||||||||||
| Dividends from net investment income | (0.00) | (0.00) | (0.00) | (0.00) | (0.01) | (0.97) | ||||||
| Distributions from net realized gains | (0.05) | (10.64) | (0.21) | (0.61) | (0.16) | (3.37) | ||||||
| |
|
|
|
|||||||||
| Total distributions | (0.05) | (10.64) | (0.21) | (0.61) | (0.17) | (4.34) | ||||||
| |
|
|
|
|||||||||
| Net asset value, end of period | $156.61 | $155.45 | $154.27 | $147.61 | $126.63 | $130.24 | ||||||
| |
|
|
|
|||||||||
| Total Return | 0.78%† | 7.78% | 4.66% | 17.12% | -2.64% | 10.52% | ||||||
| Ratios/Supplemental data | ||||||||||||
| Net assets, end of period (in millions) | $3,478.2 | $3,573.3 | $3,772.4 | $3,973.6 | $3,905.1 | $4,230.1 | ||||||
| Ratio to average net assets: | ||||||||||||
| Expenses | 1.0%* | 1.0% | 1.0% | 1.0% | 1.0% | 1.0% | ||||||
| Net investment income | -0.4%* | -0.5% | -0.4% | -0.5% | -0.3% | 0.8% | ||||||
| Portfolio turnover rate | 9%* | 8% | 6% | 3% | 8% | 7% | ||||||
| † | Not annualized |
| * | Annualized |
Results of Stockholder Meeting
A Special Meeting of the Stockholders of Sequoia Fund, Inc. was held on February 24, 2006. At the meeting, the stockholders were asked to consider the approval of a new Investment Advisory Contract between the Fund and Ruane, Cunniff & Goldfarb Inc. A majority of the outstanding voting shares of the Fund, as defined in the Investment Company Act of 1940, voted in favor of approving the new Investment Advisory Contract as follows: 13,540,662 shares voted in favor, 91,891 voted against with 83,056 shares abstaining.
Other information
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Form N-Q is available on the SEC's web site at http://www.sec.gov. The Fund's Form N-Q may also be reviewed and copied at the SEC's Public Reference Room in Washington, DC. For information regarding the operation of the SEC's Public Reference Room, call 1-800-SEC-0330. For a complete list of the Fund's portfolio holdings, view the most recent quarterly, semiannual or annual report on Sequoia Fund's web site at http://www.sequoiafund.com/fund_reports.htm.
You may obtain a description of the Fund's proxy voting policies and procedures, and information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, without charge. Visit Sequoia Fund's web site at www.sequoiafund.com and use the "Shareholder Information" link to obtain all proxy information. This information may also be obtained from the Securities and Exchange Commission's web site at www.sec.gov.
SEQUOIA FUND, INC.
767 Fifth Avenue, Suite 4701
New York, New York 10153-4798
(800) 686-6884
Website: www.sequoiafund.com
DIRECTORS
Richard T. Cunniff
Robert D. Goldfarb
David M. Poppe
Vinod Ahooja
Roger Lowenstein
Francis P. Matthews
C. William Neuhauser
Sharon Osberg
Robert L. Swiggett
OFFICERS
Richard T. Cunniff — Vice Chairman Robert D. Goldfarb — President David M. Poppe — Executive Vice President Joseph Quinones, Jr. — Vice President, Secretary, Treasurer & Chief Compliance Officer
INVESTMENT ADVISER
Ruane, Cunniff & Goldfarb Inc.
767 Fifth Avenue, Suite 4701
New York, New York 10153-4798
DISTRIBUTOR
Ruane, Cunniff & Goldfarb LLC
767 Fifth Avenue, Suite 4701
New York, New York 10153-4798
CUSTODIAN
The Bank of New York
MF Custody Administration Department
One Wall Street, 25th Floor
New York, New York 10286
REGISTRAR AND SHAREHOLDER SERVICING AGENT
DST Systems, Inc.
P.O. Box 219477
Kansas City, Missouri 64121
LEGAL COUNSEL
Seward & Kissel
One Battery Park Plaza
New York, New York 10004
This report has been prepared for the information of shareholders of Sequoia Fund, Inc.