Weitz Funds N-CSRCertified annual shareholder report (management investment company)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number                                     811-21410

The Weitz Funds

(Exact name of registrant as specified in charter)

1125 South 103 Street, Suite 200   Omaha, NE   68124-1071

(Address of principal executive offices)        (Zip code)

Weitz Investment Management, Inc., 1125 South 103 Street, Suite 200, Omaha, NE 68124-1071

(Name and address of agent for service)

Registrant’s telephone number, including area code: (402) 391-1980

Date of fiscal year end: March 31

Date of reporting period: March 31, 2023

Item 1. Reports to Stockholders.

ANNUAL REPORT

March 31, 2023

EQUITY
Weitz Partners III Opportunity Fund
Weitz Partners Value Fund
Weitz Value Fund

ALLOCATION
Weitz Balanced Fund

FIXED INCOME
Weitz Core Plus Income Fund
Weitz Nebraska Tax-Free Income Fund
Weitz Short Duration Income Fund
Weitz Ultra Short Government Fund

2 2023 Annual Report

THE WEITZ PHILOSOPHY

Finding quality at a discount

There are no shortcuts in value investing. At Weitz, we dig for opportunities using a robust quality scoring process. We analyze hundreds of ideas to find strong, well-managed but undervalued companies that offer reasonable risk-adjusted returns. It’s simple – but it’s not easy. We do the due diligence, analyze, ask tough questions and push for answers. We wait for the right opportunities. Then, and only then, do we invest your money.

Fundamental Research-Driven Process

Our research-driven investment approach means deeply understanding our investable universe so we can capitalize on opportunities that arise out of market inefficiencies. Each of our analysts focuses on finding opportunities in specific industries, ensuring deep, ongoing research within their own areas of expertise. We also encourage a generalist mentality where all investment team members vet new ideas. All investment decisions are backed by thorough analysis, logical strategies, extensive debate and our team’s commitment to long-term growth.

Bottom-Up Focus

Our focus is on finding well-run companies with strong fundamentals and outstanding long-term prospects. Valuation is our North Star. When a security is selling at a significant discount to its intrinsic value, that’s when we buy. And when it’s not selling at a discount, we have the discipline and patience to wait for the price to come our way.

High-Conviction Investing

We believe there are a limited number of great investment ideas and that intrinsic value doesn’t change with the daily ebbs and flows of the market. Our high-conviction approach means we know what we own inside and out, allowing our funds to be highly concentrated.

Today we are responsible for approximately $4 billion in investments for our shareholders – individuals, corporations, pension plans, foundations and endowments. And our commitment remains the same: to put your goals first. Always. We do so through our expertise, our flexibility, and our drive to uncover investments that can help you preserve and grow wealth.

We’re right beside you

Weitz employees have a strong commitment of investing their own assets in our mutual funds. By aligning our goals with yours, you can have confidence that we’re treating your money as if it were our own.

2023 Annual Report 3

TABLE OF CONTENTS

Beginning 2021, paper copies of the Fund’s shareholder reports are no longer sent by mail unless specifically requested. Reports will be made available at weitzinvestments. com and you will be notified by mail each time a report is posted. You will continue to receive other Fund regulatory documents (such as prospectuses or supplements) in paper unless you have elected to receive all Fund documents electronically.

If you would like to receive the Fund’s future shareholder reports in paper free of charge, you may make that request (1) by contacting your financial intermediary; or (2) if you invest directly with the Fund, by calling 888-859-0698.

The management of Weitz Funds has chosen paper for the 84 page report from a paper manufacturer certified under the Sustainable Forestry Initiative ^® standard.

Portfolio composition is subject to change at any time and references to specific securities, industries, and sectors referenced in this report are not recommendations to purchase or sell any particular security. Current and future portfolio holdings are subject to risk. See the Schedules of Investments included in this report for the percent of assets in each of the Funds invested in particular industries or sectors.

4 2023 Annual Report

VALUE MATTERS: Staying Focused Through Changing Times

March 31, 2023

During the first quarter of 2023, the Federal Reserve continued to raise short-term interest rates in its quest to tame inflation. In response, the economy slowed, corporate earnings softened and a number of inflation measures moved in the right direction – lower.

Investors, having been conditioned over the past 20 years to expect relief from the Fed at the first sign of market weakness, appear to be positioned for a near-term policy “pivot.” Fed Chair Jerome Powell, on the other hand, has cautioned that rate cuts are not in the cards for 2023. Our guess is that while rates may not be raised much higher, the Fed is likely to keep them high for longer than many expect, to be sure their mission of taming inflation is accomplished.

Meanwhile, after a relatively stable January and February, Silicon Valley Bank (SVB) experienced a severe “run on the bank.” Regulators stepped in quickly to guarantee all SVB deposits in order to reassure depositors in all banks, but it was too late to save SVB. These developments both exacerbated fears of recession and raised hopes that the Fed would relent and lower rates.

Confusion and angst reigned as the quarter came to a close. To preview our working assumptions, we believe that the banking industry is sound and that good companies will cope successfully with the economic slowdown. We do not have predictions to offer, but we will try to answer some questions that our investors are likely asking.

Bank Failures – How Serious a Problem for Investors?

SVB has a colorful history, and the story of its failure is still being written. It was very different from most banks because of its concentration on the venture capital (VC) and technology startup industries. Deposits for all banks have risen sharply in recent years, reflecting stimulative fiscal and monetary policies, and SVB served an industry that was attracting lots of capital. A very large percentage of its deposits came from individuals and companies related to the VC world. Nearly all were held in accounts larger than the $250,000 FDIC limit and thus were uninsured.

The red-hot market for tech stocks had cooled some time ago, but ironically, the trigger for the bank run was SVB’s government bond portfolio. The bank had invested a large portion of its deposits in fixed-rate government bonds. As interest rates rose, the market value of those bonds declined. When it was disclosed that SVB’s unrealized losses were very large relative to its required regulatory capital, doubts arose about the safety of the uninsured deposits. In this closeknit community, connected by social media and influenced by a handful of VC decisionmakers, fear spread rapidly, and demands for withdrawals overwhelmed the bank. The FDIC moved quickly to guarantee its deposits, but it was too late to save SVB. Silvergate Bank and Signature Bank (SBNY) faced similar runs and were also seized by the FDIC.

The regulatory fix for the banking industry was to provide liquidity to all banks that experienced serious deposit outflows. By the nature of “fractional reserve banking,” all banks hold deposits and loans equal to many times their equity capital, so no bank can withstand a “run” on its deposits. But if depositors know their money is safe, there is no need for a run. The post-Great Financial Crisis (GFC) regulatory changes and disclosure requirements, especially for the largest banks, have made the banking system much sounder. It is all about confidence in the system.

A separate question for investors is the outlook for bank earnings. Rising interest rates impact the value of loan and bond portfolios and raise the cost of deposits as alternative investments (e.g., money market funds) provide stiffer competition for savings. A slower economy increases the risk of loan defaults, and post-Covid changes in shopping and office use threaten to have a serious impact on commercial real estate lending. Further, every financial “crisis” seems to bring with it new rules and regulatory costs.

Bank earnings may face headwinds for a while, but interest rate and credit cycles are a normal part of banking life. Each bank is different, and generalizing is dangerous. Investors will need to reassess the outlook for earnings growth on a case-by-case basis, but the stocks of sound banks, at the right price, can still make very attractive investments. Our only bank stock holding as of 3.31.2023 is JPMorgan Chase & Co. in the Balanced Fund. This will be, as they say, a “developing” story.

Will There Be a Recession in the U.S.?

We believe this question is a bit of a red herring. Whether the National Bureau of Economic Research labels this period a “recession” is not nearly as important as how our individual businesses perform. Interest rate sensitive industries, like housing, may already be in recession. Others that are less cyclical, or that are beneficiaries of a slowdown, are still doing well and may continue to grow despite a recession.

Our take is that the Fed does not know how hard it will be to bring inflation down to its 2% target. Ten-plus years of artificially suppressed interest rates, a pandemic that shut the country down for over a year, government spending of unprecedented scale, and three bear markets (20% drawdowns in the S&P 500) in five years (2018, 2020, and 2022) make references to financial history tenuous at best.

The Fed is taking action because it believes the economy is too strong and the labor market too tight. Its efforts to slow down activity and lessen wage and price pressures are designed to weaken the economy. Whether they “over-achieve” and cause a recession or get lucky with a “soft landing,” our working assumption is that the companies we own will emerge from this period with their business value and future prospects intact.

In fact, while it is hard to cheer for a recession, we believe that many great companies owe a measure of their success to opportunities that arose during tough economic times. Companies with cash at the right time can acquire great assets at good prices when sellers face financial distress. And they can buy back their own shares at attractive prices, which in turn increases the value per share for the remaining shareholders. Arguably, Berkshire Hathaway (BRK) would not have been able to acquire its largest subsidiary, BNSF Railway, in 2009 if not for the Great Financial Crisis.

Recessions are merely temporary interruptions in the very long-term trend of GDP and corporate earnings growth. BRK chairman and CEO Warren Buffett describes this in his company’s 2022

2023 Annual Report 5

annual report as the “American Tailwind.” The financial media wins by creating anxiety among its audience. This increases “engagement” and sells more advertising. Investors lose by trying to anticipate and respond to near-term price movements. As we advised in another letter years ago, turn off CNBC and turn on the History Channel. (Or Ted Lasso.)

Our Game Plan – Focus on Long Term Business Value Growth

In some ways, there is nothing new under the (investing) sun. Human nature doesn’t change, and emotions continue to drive asset price swings above and below “fair value” in recurring cycles. On the other hand, the last ten years have been quite extraordinary for financial markets and disorienting for investors. We are always working to understand what the “new normal” will be for office work, shopping, travel, hospitality, media, digital advertising, artificial intelligence, etc.

Over the course of 62 years of investing, we’ve learned to take grand pronouncements about change with grains of salt. Absolute terms like “never again” and “always” have a way of looking silly within a short period. Then again, extrapolating the recent past is also dangerous. The trick for investors is to stay calm and patient, remain curious about, and alert to, change, use common sense, and be realistic and intellectually honest with themselves.

It is disconcerting to face a murky near-term outlook for the economy, but really, “uncertainty” is a permanent condition. We are watching carefully as industries and companies evolve and government policymakers do their best to keep us safe and prosperous. Individuals and company managements are endlessly resourceful. Recessions, financial crises – and even pandemics – come and go. We are still firm believers that stock prices always find their way back toward underlying business value. As long as this is true, our version of “value investing” ought to serve us well.

For full portfolio results and information on individual companies’ contributions, we would refer you to the portfolio managers’ commentaries. We would also encourage you to read Tom and Nolan’s “Fixed Income Insights.” They have done a remarkable job of preserving shareholder capital in the midst of a severe bear market for bonds.

Sincerely,

As of 03/31/2023, the following portfolio companies constituted a portion of the net assets of Balanced Fund, Partners III Opportunity Fund, Partners Value Fund, and Value Fund as follows:

• Berkshire Hathaway, Inc: 2.6%, 10.1%, 5.9%, and 4.6%.

• JPMorgan Chase & Co: 1.3%, 0.0%, 0.0%, and 0.0%.

• SVB Financial Group: 0.0%, 0.0%, 0.0%, and 0.0%.

• Silvergate Capital Corp: 0.0%, 0.0%, 0.0%, and 0.0%.

• Signature Bank: 0.0%, 0.0%, 0.0%, and 0.0%.

Portfolio composition is subject to change at any time. Current and future portfolio holdings are subject to risk.

6 2023 Annual Report

FIXED INCOME INSIGHTS: With Uncertainty Now the Norm, Bonds Remain Attractive

March 31, 2023

The first quarter was a rollercoaster ride. Bond and equity markets enjoyed a steep climb in January, only to fall in February on renewed inflation concerns and Federal Reserve hawkishness. March brought sudden fears of a banking crisis and, counterintuitively, ended with a strong rally in risk assets. While bank failures like Silicon Valley Bank (SVB) and Signature Bank are very unlikely to result in systemic risks, they create uncertainty around bank lending/credit availability and potential implications for the broader economy.

Stepping back, loan standards at banks have been tightening since last fall and tightened further in January. This was largely driven by slower repayments on existing loans due to rapidly rising interest rates. When interest rates increase rapidly, there is little incentive for refinance activity, and the lack of loan repayments, all else equal, reduces the availability of capital to make new loans.

Anecdotal evidence suggests loan standards are tightening even more briskly after recent bank failures prompted increased deposit risk. This makes sense. When banks face higher funding costs (and now the risk of tighter regulation and higher capital requirements), loans will become more expensive and harder to get. It remains to be seen how slower bank loan growth will impact the real economy, but at a minimum, it may add additional pressure on consumer and business spending already impacted by high inflation.

Zooming in on U.S. fixed income markets, the table below provides return data for select Bloomberg U.S. bond indexes for the first quarter. Longer duration and credit-sensitive indexes led the way as interest rates declined and credit performed well. Despite our lower duration profiles, we are pleased with the relative results that our investment process and flexible approach have yielded. For details regarding individual fund performance and analysis, see our funds’ quarterly commentaries.

After calmer conditions to start the year, interest rate volatility, as measured by the ICE BofA MOVE Index, reached its highest level since the Great Financial Crisis in October 2008. This played out with extreme movement in the shape of the yield curve. The table below highlights movements in U.S. Treasury yields over a broad spectrum of maturities. While the 2-year Treasury ended the first quarter down 40 bps, it fell 100 bps over three days following the SVB failure, the biggest move since 1982. Overall, yields across the maturity spectrum shifted down and flattened during the first quarter.

Interest rate volatility has also led to rapidly evolving views on the forward path of the Fed’s interest rate policy. The chart below highlights the pre-SVB expected path of Fed Funds (red line) and the current (as of March 20th) expected path (maroon line), which equates to an approximately 200 bps shift down in the Fed funds rate.

As a result, a great divide has emerged between market expectations and the Fed, which expects short-term interest rates to remain elevated for some time. We believe it is unlikely that a deeply inverted yield curve, along with expectations of significant Fed cuts, herald an environment of lower, yet sturdy economic growth and inflation returning to a long-run rate of 2%.

The amount of Fed easing that investors expect also matters. History would suggest that it is ill-advised to place risky bets on expectations of significant interest rate cuts. According to Morgan Stanley, since 1980 there have been six Fed easing cycles of 150 bps or more. Five of those six easing cycles were associated with recessions, or 83% of the time.

U.S. economic resiliency largely lies at the feet of the strong labor market and consumer spending. With the March 2023 unemployment rate near an all-time low of 3.5%, all eyes will remain on the jobs market. Since 1949, every time the unemployment rate has risen by 1% or more over a 12-month period, a recession has always happened.

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Rate volatility aside, credit markets broadly are not signaling
much in the way of potentially hazardous conditions down the
road. After a brief spike up to 164 bps in early March, broad
investment grade credit spreads finished the first quarter at 145
bps, up from 138 bps at year-end. However, dispersion in credit
spreads by sector and issuer has increased, which may present
compelling opportunities. The high yield market faired even
better. After rising to 522 bps (up from 481 bps at year-end), high
yield spreads finished the first quarter at 458 bps.

Outlook
We expect the path forward will be bumpy and the range of
outcomes will remain wide. However, we continue to add
attractive investments to our portfolios across a diverse array of
sectors within corporate credit and securitized products. We also
maintain sizable Treasury holdings to provide ballast and enable
us to take advantage of opportunities brought on by market
turbulence. We remain highly focused on the credit performance
of our underlying investments and, overall, we remain pleased
with the quality and performance of our portfolios. Coupling our
differentiated investment approach with the potential for forward
returns that haven't been this good in many, many years leaves
us very encouraged by future return possibilities.

Portfolio composition is subject to change at any time. Current and future portfolio
holdings are subject to risk.

Definitions: Investment-Grade Bonds are those securities rated at least BBB- by
one or more credit ratings agencies. Non-Investment Grade Bonds are those
securities (commonly referred to as “high yield” or “junk” bonds) rated BB+ and
below by one or more credit ratings agencies.

8 2023 Annual Report

DISCLOSURES

Data quoted is past performance and current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. All investments involve risks, including possible loss of principal. Please visit weitzinvestments.com for the most recent month-end performance.

Investment results reflect applicable fees and expenses and assume all distributions are reinvested but do not reflect the deduction of taxes an investor would pay on distributions or share redemptions. Certain Funds have entered into fee waiver and/or expense reimbursement arrangements with the Investment Advisor by which the Advisor has contractually agreed to waive a portion of the Advisor’s fee and reimburse certain expenses (excluding taxes, interest, brokerage costs, acquired fund fees and expenses and extraordinary expenses) to limit the total annual fund operating expenses of the Fund’s average daily net assets through Contractual Expiration Date of 07/31/2023. If this arrangement had not been in place, the performance results would have been lower.

The net expense ratio reflects the total annual fund operating expenses of the Fund after taking into account any such fee waiver and/or expense reimbursement. Net and gross expense ratios are as of the Fund’s most recent prospectus.

Performance quoted for the Balanced, Partners Value and Value Funds’ Institutional Class shares before their inception is derived from the historical performance of the Investor Class shares, which have not been adjusted for the expenses of the Institutional Class shares, had they, returns would have been different.

Performance quoted for the Partners III Opportunity and Short Duration Income Funds’ Investor Class shares before their inception is derived from the historical performance of the Institutional Class shares, which have not been adjusted for the expenses of the Investor Class shares, had they, returns would have been different.

Index performance is hypothetical and is shown for illustrative purposes only. You cannot invest directly in an index. See page 79 for a description of all indices. All indices Since Inception return are since the Fund’s inception. The inception date of the Bloomberg 1-3 Year U.S. Aggregate Index and the Bloomberg 5-Year Municipal Bond Index was 12/31/1992 and 1/29/1988, respectively.

On 12/29/2006, the Nebraska Tax-Free Income Fund succeeded to substantially all of the assets of Weitz Income Partners Limited Partnership. On 12/31/1993, Partners Value Fund succeeded to substantially all of the assets of Weitz Partners II Limited Partnership. On 12/30/2005, Partners III Opportunity Fund succeeded to substantially all of the assets of Weitz Partners III Limited Partnership. The investment objectives, policies and restrictions of the Funds are materially equivalent to those of the Partnerships, and the Partnerships were managed at all times with full investment authority by the Investment Adviser. The performance information includes performance for the Partnerships. The Partnerships were not registered under the Investment Company Act of 1940 and, therefore, were not subject to certain investment or other restrictions or requirements imposed by the 1940 Act or the Internal Revenue Code. If the Partnerships had been registered under the 1940 Act, the Partnerships’ performance might have been adversely affected.

Effective 12/16/2016, the Ultra Short Government Fund revised its principal investment strategies. Prior to that date, the Fund operated as a “government money market fund” and maintained a stable net asset value of $1.00 per share. Performance prior to 12/16/2016 reflects the Fund’s prior principal investment strategies and may not be indicative of future performance results.

Effective 12/16/2016, the Short Duration Income Fund revised its principal investment strategies. Since that time the Fund has generally maintained an average effective duration between one to three and a half years. Prior to that date, the Fund maintained a dollar–weighted average maturity of between two to five years. Performance prior to 12/16/2016 reflects the Fund’s prior principal investment strategies and may not be indicative of future performance results.

2023 Annual Report 9

PERFORMANCE SUMMARY

Returns (%) as of 3/31/2023

* Denotes the Fund's inception date and the date from which Since Fund Inception performance is calculated.

10 2023 Annual Report

ANALYST CORNER

A Reintroduction to CarMax By Jon Baker, CFA

We first wrote about CarMax back in 2019, about a year after our initial purchases of shares priced in the low $60s. CarMax was then (and remains today) the largest used car dealer in the U.S. At the time, we described CarMax as authentically customer-focused, but aware that online competitors like Carvana had advanced the consumer experience ball well down the field. CarMax had responded with its first omnichannel ‘bricks & clicks’ market in Atlanta and was prepping a broader rollout of hybrid online and offline capabilities to its nationwide store base.

In 2019, both CarMax and Carvana already had difficult paths ahead. CarMax entered the year with an established brand and a huge volume lead but had to rebuild the digital workings of its entire business without impairing customer service. Carvana needed to manage enormous growth in the hopes of scaling before legacy retailers like CarMax could mimic its clean, purpose-built offering. In its sprint from behind, Carvana has endured years of heavy losses, plugging sustained cash flow shortfalls with debt and equity raises along the way. Then, along came COVID, asking still more difficult questions of both organizations.

In some ways, the pandemic may have helped CarMax’s digital transition. If the organization lacked true unanimity around the need for a seamless digital offering coming into this period, COVID’s forced store closures and occupancy restrictions focused efforts to digitize into a white-hot pinpoint. Within weeks of COVID’s initial waves, CarMax’s formerly in-person wholesale auctions – local sales of customer trade-ins not fit for CarMax’s own lots – went 100% virtual. The already-in-motion push of omnichannel capabilities across the chain’s 200+ stores accelerated.

Early 2020 brought curbside pick-up and home delivery to most buyers. In the back half of the year, CarMax enabled online car buying in all their markets and launched online instant appraisals for vehicles consumers wanted to sell. In 2021, CarMax introduced its “Love Your Car Guarantee,” including new 24-hour at-home test drives and a 30-day money-back option. More recently, CarMax debuted its finance-based shopping engine, allowing consumers to filter using accurate, real-time payment data.

Consumers responded positively to this evolved offering and in 2021 rewarded CarMax with its largest single-year increase in market share ever. However, in late 2021, cracks in the used vehicle market began to appear. CarMax’s shares peaked that November in the $150s and since then have underperformed the S&P 500 by about 35%.

Things were going so well, what happened?

In the several years prior to COVID, sales of new passenger cars and lightweight trucks in the U.S. averaged around seventeen million units per year. Used unit transactions averaged more than double that number over the same period. At COVID’s outset, new vehicle purchases plunged below a nine million unit annual run rate, and manufacturers scrambled to cancel supply orders, including commitments for semiconductor capacity – capacity that was quickly taken up for other uses. Soon, the combination of stimulus payments and constrained spending (on things like travel and dining) resulted in a particularly flush consumer. Despite very strong demand for new vehicles, semiconductor supply constraints began throttling production volumes by mid-2021. Manufacturers have managed only about 80% of ‘normal’ production levels since. That unfulfilled new vehicle demand inevitably leapt its banks, flowing unabated into the used market. Used vehicle prices went parabolic throughout 2021, topping out some 70% above pre-COVID levels.

Into this already noxious brew, we have more recently poured the highest auto loan interest rates since the Great Recession, making already expensive used vehicles even less affordable. Too few vehicles costing too much money at too high financing rates have combined to crater used vehicle transactions. In the most recently reported quarter, CarMax’s same-store retail unit volumes were down more than 20% from the prior year. Apart from the abrupt first quarter of COVID and the Great Recession, that is the worst volume growth quarter in our CarMax data stretching back to the year 2000.

CarMax’s stock price has been volatile for several months, and the company’s results in 2023 will almost certainly be terrible. Expecting sustained demand and a more normal supply environment, management got well out over their skis spending on investment initiatives. Having printed nearly $7 in earnings per share (EPS) a little over a year ago, it’s not too difficult to imagine EPS in the coming year beginning with a $2 – or even $1 – handle. To be frank, we would be surprised if the stock rerated meaningfully higher before the used vehicle market begins to normalize. Currently, nearly 15% of CarMax’s shares are sold short. In the very near term, we can understand the desire to bet against the stock.

So why own the stock?

The high-minded answer to that question is that we like CarMax’s people, its business model, and its culture. CarMax behaves in a way that cultivates long-term, balanced relationships with its stakeholders (customers, employees, lenders, investors), and we tend to believe that kind of behavior gets rewarded. As difficult as this omnichannel transition has been for CarMax, we think it puts them in the best position to serve the most used vehicle buyers in the country. We know we want exposure to these things for a long time to come, no matter the chasm the industry currently negotiates.

The baser response to that question – Why own the stock? – is that we are eager to capture the returns we believe are in store. Today, a CarMax shareholder would need to be asleep at the switch to lack appreciation for the likely damage to near-term earnings. To our minds, 2023 is effectively baked, and our gaze has turned toward the future. With earnings in a repaired used vehicle selling environment likely significantly higher than we expect near term, whether 2023 produces EPS of $3 or even $0 has little bearing upon our ultimate outcome.

If we love a business – and if we believe several years of high returns are in store – we are highly unlikely to sell shares in the hopes of sidestepping some temporary hit that may or may not ever come. If the share price of that business falls substantially and our expectations for future returns from that lower price level consequently grow, our more likely response would be to buy more. The gravitational pull of our largely unimpacted future business value grows stronger with each passing day – with each downtick of share price.

Now, this all presumes a business that is actually worthy of love –a business that will not be taken from us nor forced to dilute our ownership share. In that regard, the debt for which CarMax itself is responsible looks entirely reasonable relative to the value of its inventory. That borrowing will likely – and reasonably – evolve along with inventories as the volume of CarMax’s business itself

2023 Annual Report 11

evolves. And we are hard-pressed to think of a company more
capable of managing used vehicle inventories than CarMax.
The more we can grant CarMax a balance sheet positioned to
withstand great agitation, the less our expected future reward
seems a matter of “if” but rather “when.”

As of 03/31/2023, CarMax, Inc. constituted a portion of the net assets of
Balanced Fund, Partners III Opportunity Fund, Partners Value Fund, and
Value Fund as follows: 0.0%, 4.1%, 3.2%, and 2.2%.

Holdings are subject to change and may not be representative of the
Fund's current or future investments.

Jon Baker, CFA, joined Weitz Investment Management in 1997. Prior to joining the firm, he audited equity funds (including the Weitz Funds) as a certified public accountant at McGladrey & Pullen. Jon has a bachelor's in accounting and computer applications from the University of Notre Dame.

12 2023 Annual Report

BALANCED FUND

Portfolio Managers: Brad Hinton, CFA & Nolan Anderson

Investment Style: Conservative Allocation

The Balanced Fund’s Institutional Class returned +2.48% for the first quarter compared to +3.90% for the Morningstar Moderately Conservative Target Risk Index. For the fiscal year ended March 31, 2023, the Fund’s Institutional Class returned -4.01% compared to -5.44% for the index.

Over a 10-year period, the Fund’s Institutional Class has returned +5.38% annualized compared to +4.36% for the index. With that longer-term lens, total returns well above inflation (10-year average rate of 2.4%) have helped our investors retain and build wealth.

The first quarter seemed reminiscent of Disney’s Space Mountain rollercoaster. Equity markets soared in January, dipped in February, endured abrupt twists and turns through a few harrowing “bank watch” weekends in March, and closed with a gentle glide higher into quarter-end. Through it all, investors may have felt like they too were on a thrill ride in the dark.

On balance, it was an acceptable quarter for the Fund. Solid absolute returns were welcome after a tough year. Risk taking was broadly rewarded, with aggressive growth stocks, longer duration bonds, and credit-sensitive securities leading the way. Our steady “pontoon boat” approach often does not keep pace in racier “speedboat” conditions, and we are comfortable with that trade-off over full market cycles.

Despite widespread positive returns, conditions – as mentioned – seemed like a rollercoaster ride. The March failures of Silicon Valley Bank and Signature Bank set off a wave of concern across financial markets. While swift action by the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and Treasury Department ensured that depositors of those institutions would not lose money, confidence was shaken in all but the largest financial institutions. Please see this quarter’s “Value Matters” for our take on how the bank failures fit into the bigger picture.

At a minimum, the Fed’s inflation-fighting formula just became more complicated – as banks repair their balance sheets, financial conditions will further tighten. Fearful of recession and chastened by 2022’s market declines, Wall Street has become even more adamant that the Fed should pause rate hikes now and move to cut interest rates later this year. This widely held consensus view is squarely at odds with the Fed’s stated intentions, setting up a showdown that will keep things interesting for the foreseeable future. In our view, the case for owning durable, resilient, and adaptable businesses and high-quality bonds has never been stronger.

Analog Devices, Microsoft, Alphabet, and Oracle were the Fund’s largest quarterly equity contributors. Business results ranged from “better than feared” to “quite good,” fueling double-digit stock returns. The financial and health care sectors lagged during the quarter as banking concerns flared and investors chased stocks with more octane. Charles Schwab was the Fund’s largest quarterly detractor, followed by Fidelity National Information Services (FIS), Danaher, and Honeywell.

We sold the Fund’s Schwab position in March. Our concerns were primarily related to the depth and length of a potential earnings valley. As the Fed pushed up short-term interest rates, money market funds and Treasury bills provided savers with clear alternatives to banks’ ultra-low yielding deposits. Schwab’s near-term cost of funding seemed likely to rise materially, one way or the other. Some earnings erosion is reflected in the stock price, but we sold as our view of the risk/reward framework shifted considerably. While our final exit price was well below the highs, Schwab was an exceptional contributor to Fund returns over the past three years.

Analog Devices, IDEX, Oracle, Fortive, and Linde were the Fund’s largest contributors for the fiscal year. The Fund’s industrial stocks held up better than the broader market as the economy remained resilient despite mounting pressures. Liberty Broadband, Alphabet, FIS, and Schwab were the Fund’s largest equity detractors for the fiscal year; however, the Qurate 8% preferred security was the Fund’s worst performer overall for this period. Qurate’s turnaround plan is off to a bumpy start, and we are monitoring developments closely.

We added to the Fund’s positions in Accenture, Berkshire Hathaway, Diageo, JPMorgan Chase, and FIS during the quarter. Our focus on more prosaic and well-entrenched businesses was intentional given the crosscurrents in the economy and financial markets. We sold the Fund’s Redwood Trust equity position after the stock rallied sharply early in the quarter. We still own the company’s convertible bonds that mature next year, which in our view offer reasonable value.

As principal payments continued to roll in from the Fund’s shorter-dated bonds, we have been able to reinvest at prevailing higher yields. We purchased more 3-year Treasuries, though we arguably were too tentative in adding duration. We also sprinkled in small individual positions in asset-backed debt, with a heavy focus on sponsor quality, structural protection, and straightforward collateral. Other than a modest purchase of bonds issued by Vulcan Materials, we were not active in corporate credit markets during the quarter.

The Fund’s fixed income portfolio now yields approximately 5%, with a duration under two years. This profile represents a remarkable improvement from a year ago, and for that matter, an improvement from most of the last decade. These yields are available with high average credit quality (more than 97% investment-grade), offering savers real and welcome alternatives.

The Fund’s overall portfolio continues to evolve with market conditions. We own common equity stakes in 27 companies totaling 42.9% of net assets. High-yielding, hybrid securities represent another 1.4% of the Fund. The fixed income portfolio includes investment-grade corporate bonds (1.1%), securitized debt (14.2%), Treasury securities (36.4%), and cash equivalents/ other (4.0%). We have plenty of capacity to lean into new opportunities as our team uncovers them.

We think the investing landscape for allocation investors has materially improved. In our view, the Fund is well positioned to deliver long-term capital appreciation. Sustained, higher interest rates have enhanced the current income outlook. And sizeable holdings of short maturity Treasury securities and cash provide healthy ballast with decent yields. As always, we encourage investors to evaluate the strategy on a total-return basis over longer time horizons.

Definitions: Investment Grade Bonds are those securities rated at least BBB- by one or more credit ratings agencies.

2023 Annual Report 13

Returns

All data as of 3/31/2023 unless otherwise indicated. Data quoted is past performance and current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. All investments involve risks, including possible loss of principal. Please visit weitzinvestments.com for the most recent month-end performance.

Investment results reflect applicable fees and expenses and assume all distributions are reinvested but do not reflect the deduction of taxes an investor would pay on distributions or share redemptions. The Fund has entered into fee waiver and/or expense reimbursement arrangements with the Investment Advisor by which the Advisor has contractually agreed to waive a portion of the Advisor’s fee and reimburse certain expenses (excluding taxes, interest, brokerage costs, acquired fund fees and expenses and extraordinary expenses) to limit the total annual fund operating expenses of the Fund’s average daily net assets through 07/31/2023. If this arrangement had not been in place, the performance results would have been lower. The net expense ratio reflects the total annual fund operating expenses of the Fund after taking into account any such fee waiver and/or expense reimbursement. Net and gross expense ratios are as of the Fund’s most recent prospectus.

See page 8 for additional performance disclosures. See page 79 for a description of all indices. See page 80 for a Glossary of Terms.

Credit ratings are assigned to underlying securities utilizing ratings from a Nationally Recognized Statistical Rating Organization (NRSRO) such as Moody’s and Fitch, or other rating agencies and applying the following hierarchy: security is determined to be Investment Grade if it has been rated at least BBB- by one credit rating agency; once determined to be Investment Grade (BBB- and above) or Non-Investment Grade (BB+ and below) where multiple ratings are available, then the lowest rating is assigned. Mortgage-related securities issued and guaranteed by government-sponsored agencies such as Fannie Mae and Freddie Mac are generally not rated by rating agencies. Securities that are not rated do not necessarily indicate low quality. Ratings are shown in the Fitch scale (e.g., AAA). Ratings and portfolio credit quality may change over time. The Fund itself has not been rated by a credit rating agency.

Contributions to performance are based on actual daily holdings. Returns shown are the actual quarterly returns of the security.

Source (Fixed Income Attributes, Credit Quality, and Maturity Distribution): Bloomberg Analytics

Source (Top Performers, Bottom Performers): Statpro

14 2023 Annual Report

CORE PLUS INCOME FUND

Portfolio Managers: Tom Carney, CFA & Nolan Anderson

Investment Style: Intermediate-Term Core Plus Bond

The Core Plus Income Fund’s Institutional Class returned +3.27% for the first quarter compared to a +2.96% return for the Bloomberg U.S. Aggregate Bond Index (Agg). For the fiscal year ended March 31, 2023, the Fund’s Institutional Class returned -2.98% compared to a -4.78% return for the index. Given the investment challenges of the past year, we are pleased to report positive absolute results for the quarter and good relative results for the fiscal year.

Despite the dizzying ups and downs of an extremely volatile first quarter, fixed income investors generally posted solid gains (our Fund included), riding the strong performance of U.S. Treasury bonds (as they often do). Price gains for bonds in January resulting from weak economic data fueled speculation of a Fed pivot, or at least a pause, in its year-long pursuit of higher short-term interest rates to slow inflation. February brought a ‘blowout’ jobs report that undermined any thoughts of a slowdown and resulted in a violent reversal of January’s interest rate rally (as rates decrease, bond prices increase). By early March, the yield curve had reached its deepest inversion (the difference between 2-year and 10-year U.S. Treasury rates) in over 40 years.

Recession fears eased and pundits began to believe the economy could grow despite the Fed’s efforts to tame inflation. Then came the collapse of Silicon Valley Bank (and others) and overall turmoil in the banking industry. Rates plummeted during the final stretch of the first quarter in a classic flight to safety amid growing worries about tightening lending conditions and the attendant effects on future economic growth. ‘Pause’ or ‘pivot’ has been replaced by market expectations of rate cuts later this year. Overall, the first quarter of 2023 had echoes of 2022. Instead of calm after a tumultuous year, investors have received more volatility and choppy markets. However, overall forward returns in fixed income (tax-free and taxable) are where the echoes/comparisons end. For the first time in seemingly forever, forward (coupon) returns compensate for this year’s volatile/ choppy markets where the higher overall yield environment presents a much wider range of attractive investment opportunities for fixed-income investors.

Whether the Fed does pause or pivot in its battle against inflation, we have been active in improving the forward return prospects for the Core Plus Income Fund. Part of this improvement can be seen in the Fund’s improved yield-to-worst (YTW) metric. As a reminder, YTW has historically been a reasonable predictor of forward returns. The Fund’s YTW increased from 3.32% on March 31, 2022, to 5.47% on March 31, 2023 – comparing favorably to the index’s YTW of 4.40% as of March 31 (see table below). As important, or perhaps more so, the difference of percentage change between the Fund’s and the index’s YTW has widened over the past year, while our duration has increased relative to the Agg.

The chart below provides a longer-term view (since inception) of the Core Plus Income Fund’s forward return prospects, or yield-to-worst (YTW). Until the first quarter of 2020 (right-hand side of the bar chart below), the Fund’s YTW had never breached 4%. It has now exceeded 5.4% for three consecutive quarters. Given the average since September 30, 2014, of 3.3% of the time series below, today’s forward return prospects as measured by a YTW of 5.47% on March 31, 2023, reinforce comments we made in the 2022 year-end Fixed Income Insights (Bonds’ ‘Great Reset’ and the Return of Income), that we remain particularly optimistic about the role fixed-income has in an overall asset allocation framework.

Portfolio Positioning

The table below shows the change in allocation to various sectors, from the prior quarter and from the prior year. This summary provides a view over time of how we have allocated capital. Since our goal is to invest in sectors that we believe offer the best risk-adjusted returns, our allocations may change significantly over time.

2023 Annual Report 15

*Corporate CLOs are included in the ABS segment in the Fund’s schedule of investments but are additionally called out separately for the purposes of the discussion.

**For the current period, high-yield exposure consists of investments in the Corporate, Corporate Convertible, ABS, and CMBS sectors.

Totals may be greater or less than 100 due to rounding.

The largest change in sector allocation during the first quarter was an increase in asset-backed securities (ABS). We added new-issue automobile and consumer ABS, as well as middle-market collateralized loan obligations (CLOs). We continue to view the risk/reward in ABS as attractive despite the continued macro volatility. These new-issue transactions include collateral pools consisting of primarily newly originated loans that incorporate tighter underwriting standards and higher pricing.

We also reduced our exposure to commercial mortgage-backed securities (CMBS) as our ongoing surveillance work suggests that financial pressures continue to build across all commercial property types due to rising interest rates, despite generally strong operating performance. Should weakening fundamentals provide better entry points over the next several quarters, we have ample capacity to add CMBS exposure.

In terms of overall portfolio metrics, the Fund’s average effective maturity decreased to 7.9 years as of, March 31, 2023, from 8.2 years as of December 31, 2022, while our average effective duration increased to 5.2 years from 5.0 years over the same time period. These measures provide a guide to the Fund’s interest rate sensitivity. A higher average effective duration increases the Fund’s price sensitivity to changes in interest rates (either up or down). As of March 31, 2023, the average effective duration of the Agg was 6.3 years.

As of March 31, our high-yield exposure as a percent of net assets was 6.6%, down from 8.4% on December 31, 2022. Given that the Fund can invest up to 25% of net assets in high yield, we have ample capacity to take advantage of valuation discrepancies/ opportunities in the high yield area.

A key differentiator for the Fund relative to the Agg is our approximately 18% exposure to floating rate securities (versus no exposure for the Agg). Our floating rate securities primarily consist of A-rated to AAA-rated CLOs. Our CLOs consist of diversified pools of floating rate commercial real estate loans (7%), middle market corporate loans (10%), and large corporate loans (1%). Eighteen distinct real estate sponsors manage our commercial real estate loans. The underlying real estate is most concentrated in multifamily and – to a lesser extent – industrial, retail, office, and hospitality. Our corporate CLOs primarily consist of diversified portfolios of middle-market corporate loans, each originated by a private credit sponsor. Our corporate middle-market CLO investments are diversified across twenty distinct private credit managers, giving us exposure to a broad range of obligors categorized by size, industry, and geography. These investments provide attractive coupon income and diversification benefits that are not broadly accessible in bond indexes or passive, index-tracking ETFs.

Top Quarterly Contributors

Top Quarterly Detractors

Fiscal Year Contributors

Fiscal Year Detractors

Before revisiting our Fund strategy, we thought it would be timely to include a portion of the Fund’s inaugural shareholder letter from the third quarter of 2014. While we have increased the Fund’s duration which has brought us more in line with the Agg, we believe more compelling times lie ahead, particularly in longer-duration corporate bonds, for us to utilize longer-duration corporates more fully.

Core Plus Income Fund-Why Now? (Q3 2014)

“Frequent readers of either Wally’s quarterly shareholder letters or management discussions in our other bond-oriented Funds (Balanced or Short Duration Income Fund) would know we are not making any market timing, particularly bullish, call about the direction of interest rates in launching our new Core Plus Income Fund at this time. If anything, our recent commentaries have pointed out how challenging the fixed-income landscape has become since the peak of the credit crisis (i.e. low credit spreads on top of arguably suppressed ‘risk-free’, base rates). However, we do believe there will come a time when opportunities will present themselves to invest longer-term with the broader tool kit our Core Plus Income Fund possesses. In the meantime, your management team will invest within the Fund’s flexible mandate and patiently await more favorable investment circumstances.”

Fund Strategy

Our approach consists primarily of investing in a diversified portfolio of high-quality bonds while maintaining an overall portfolio average duration of 3.5 to 7 years. We may seek to capture attractive coupon income and potential price appreciation by investing in longer-duration and lower-quality bonds when attractively priced. We may also invest up to 25% in fixed-income securities that are not considered investment grade (such as high yield and convertible bonds as well as preferred and convertible preferred stock), and we do so when we perceive the risk/reward characteristics to be favorable.

16 2023 Annual Report

We do not, and will not, try to mimic any particular index as we
construct our portfolio. We believe our flexible mandate and high-
conviction portfolio will benefit investors over the long term. We
utilize a bottom-up, research-driven approach and select portfolio
assets one security at a time based on our view of opportunities
in the marketplace. Our fixed income research is not dependent
on, but often benefits from, the due diligence work our equity
teammates conduct on companies and industries.

Overall, we strive to be adequately compensated for the risks
assumed in order to maximize investment (or reinvestment) yield
and to avoid making interest rate bets, particularly those that
depend on interest rates going down. We have often maintained
a lower duration profile than the index, particularly in very low-
yield environments. Our shorter duration profile has benefited
shareholders in periods of rising interest rates.

Maintaining a diversified portfolio and liquidity reserves is a key
element of our risk management approach. As a result, we have
not held back from owning U.S. Treasury bonds and, at times like
now, ample cash reserves. We believe this approach has served
our clients well, particularly in extreme market environments like
the pandemic brought upon us in March 2020.

Definitions: Average effective duration provides a measure of a fund’s
interest-rate sensitivity. The longer a fund’s duration, the more sensitive
the fund is to shifts in interest rates. Average effective maturity is the
weighted average of the maturities of a fund’s underlying bonds. CRE
CLOs refer to commercial real estate collateralized loan obligations
backed by a pool of commercial loads. Investment Grade Bonds
are those securities rated at least BBB- by one or more credit rating
agencies. Middle market CLOs refer to collateralized loan obligations
backed by loans made to smaller companies, which companies generally
have earnings before interest, taxes, and amortization of less than $75
million. Non-Investment Grade Bonds are those securities (commonly
referred to as “high yield” or “junk” bonds) rated BB+ and below by
one or more credit rating agencies. Yield to worst (YTW) is the lowest
potential yield that can be received on a bond portfolio without the
underlying issuers defaulting.

2023 Annual Report 17

Returns

30-Day SEC Yield

All data as of 3/31/2023 unless otherwise indicated. Data quoted is past performance and current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. All investments involve risks, including possible loss of principal. Please visit weitzinvestments.com for the most recent month-end performance.

Investment results reflect applicable fees and expenses and assume all distributions are reinvested but do not reflect the deduction of taxes an investor would pay on distributions or share redemptions. The Fund has entered into fee waiver and/or expense reimbursement arrangements with the Investment Advisor by which the Advisor has contractually agreed to waive a portion of the Advisor’s fee and reimburse certain expenses (excluding taxes, interest, brokerage costs, acquired fund fees and expenses and extraordinary expenses) to limit the total annual fund operating expenses of the Fund’s average daily net assets through 07/31/2023. If this arrangement had not been in place, the performance results would have been lower. The net expense ratio reflects the total annual fund operating expenses of the Fund after taking into account any such fee waiver and/or expense reimbursement. Net and gross expenses ratios are as of the Fund’s most recent Prospectus.

See page 8 for additional performance disclosures. See page 79 for a description of all indices. See page 80 for a Glossary of Terms.

Credit ratings are assigned to underlying securities utilizing ratings from a Nationally Recognized Statistical Rating Organization (NRSRO) such as Moody’s and Fitch, or other rating agencies and applying the following hierarchy: security is determined to be Investment Grade if it has been rated at least BBB- by one credit rating agency; once determined to be Investment Grade (BBB- and above) or Non-Investment Grade (BB+ and below) where multiple ratings are available, then the lowest rating is assigned. Mortgage-related securities issued and guaranteed by government-sponsored agencies such as Fannie Mae and Freddie Mac are generally not rated by rating agencies. Securities that are not rated do not necessarily indicate low quality. Ratings are shown in the Fitch scale (e.g., AAA). Ratings and portfolio credit quality may change over time. The Fund itself has not been rated by a credit rating agency.

Source (Fixed Income Attributes, Credit Quality, and Maturity Distribution): Bloomberg Analytics

18 2023 Annual Report

NEBRASKA TAX-FREE INCOME FUND

Portfolio Manager: Tom Carney, CFA

Investment Style: Municipal-State Bond

The Nebraska Tax-Free Income Fund returned +1.84% in the first quarter compared to a +1.93% return for the Bloomberg 5-Year Municipal Bond Index. For the fiscal year ended March 31, 2023, the Fund’s total return was +0.91% compared to a +1.75% return for the index.

Overview

Municipal bonds posted solid gains in the first quarter, riding (as they often do) the strong, but extremely volatile, performance of U.S. Treasury bonds. Price gains in January resulting from weak economic data fueled speculation of a Fed pivot, or at least a pause, in its year-long pursuit of higher short-term interest rates to slow inflation. February brought a ‘blowout’ jobs report that undermined any thoughts of a slowdown and resulted in a violent reversal of January’s interest rate rally (as rates decrease, bond prices increase). By early March, the yield curve had reached its deepest inversion (the difference between 2-year and 10-year U.S. Treasury rates) in over 40 years. Recession fears eased and pundits began to believe the economy could grow despite the Fed’s efforts to tame inflation. Then came the collapse of Silicon Valley Bank (and others) and overall turmoil in the banking industry. Rates plummeted during the final stretch of the first quarter in a classic flight to safety amid growing worries about tightening lending conditions and the attendant effects on future economic growth. ‘Pause’ or ‘pivot’ has been replaced by market expectations of rate cuts later this year. Overall, the first quarter of 2023 had echoes of 2022. Instead of calm after a tumultuous year, investors have received more volatility and choppy markets. However, overall forward returns in fixed income (tax-free and taxable) are where the echoes/comparisons end. For the first time in seemingly forever, forward (coupon) returns compensate for this year’s volatile/choppy markets where the higher overall yield environment presents a much wider range of attractive investment opportunities for fixed income investors.

During the first quarter of 2023, municipal bonds modestly outperformed their U.S. Treasury counterparts as the ratio of the 5-year AAA-rated municipal bond to the 5-year Treasury (the ‘tenor’ or maturity profile that most resembles the Nebraska Tax-Free Income Fund) declined from 64% on December 31, 2022, to 62% on March 31, 2023. The Municipal/Treasury ratio (M/T ratio) measures the relative attractiveness of tax-free municipal bonds. All else equal, the higher the ratio, the more appealing municipal bonds become, given their tax-advantaged status.

The chart below is a histogram of the 5-year municipal/Treasury ratio going back 30 years. The current ratio is noted on the chart, providing a visual of how the current level compares to the M/T ratio over a span of three decades.

Overall, today’s M/T ratio would suggest that municipal bonds are less appealing to their taxable counterparts than they have been over the past 30 years. However, the increased nominal yield environment, improved fiscal position of many municipal bond issuers, and lower overall supply help to explain some/much of today’s lower M/T ratio. The Fed’s most aggressive tightening campaign in history (bringing its policy rate from near-zero to 5%) has effectively ended the long yield drought in the bond market. Consequently, we’d reiterate the comments we made in the 2022 year-end Fixed Income Insights (Bonds’ ‘Great Reset’ and the Return of Income), that we remain optimistic about the role fixed income has in an overall asset allocation framework.

Top Quarterly Contributors

(Every segment contributed to results in the quarter. Below are some notable examples.)

Top Quarterly Detractors:

Fiscal Year Performance

For the fiscal year, all segments contributed to positive Fund results. The largest contribution segments included combined utilities revenue bonds, city general obligation bonds, higher education revenue bonds, miscellaneous tax revenue bonds, school district general obligation bonds, water and sewer revenue bonds, general revenue bonds, and electricity and public power bonds.

2023 Annual Report 19

Portfolio Metrics
Turning to portfolio metrics, the average effective duration of the
Fund declined from 3.6 years on December 31, 2022, to 3.4 years
on March 31, 2023. Average effective maturity also declined from
4.0 years to 3.5 years over the same timeframe. Overall asset
quality remains high, with approximately 89% rated A or better
by one or more of the nationally recognized statistical rating
organizations.

Following are additional details regarding the breakdown of our
holdings. Our investments are broad, and they are all backed by
a consistent philosophy: we strive to own only those investments
we believe compensate us for the incremental credit risk.
Our overall goal is to invest in a portfolio of bonds of varying
maturities that we believe offer attractive risk-adjusted returns,
taking into consideration the general level of interest rates and
the credit quality of each investment.

Definitions: Average effective duration provides a measure of a fund’s
interest-rate sensitivity. The longer a fund’s duration, the more sensitive
the fund is to shifts in interest rates. Average effective maturity is the
weighted average of the maturities of a fund’s underlying bonds. Yield to
worst (YTW) is the lowest potential yield that can be received on a bond
portfolio without the underlying issuers defaulting.

20 2023 Annual Report

Returns

30-Day SEC Yield

All data as of 3/31/2023 unless otherwise indicated. Data quoted is past performance and current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. All investments involve risks, including possible loss of principal. Please visit weitzinvestments.com for the most recent month-end performance.

Investment results reflect applicable fees and expenses and assume all distributions are reinvested but do not reflect the deduction of taxes an investor would pay on distributions or share redemptions. The Fund has entered into fee waiver and/or expense reimbursement arrangements with the Investment Advisor by which the Advisor has contractually agreed to waive a portion of the Advisor’s fee and reimburse certain expenses (excluding taxes, interest, brokerage costs, acquired fund fees and expenses and extraordinary expenses) to limit the total annual fund operating expenses of the Fund’s average daily net assets through 07/31/2023. If this arrangement had not been in place, the performance results would have been lower. The net expense ratio reflects the total annual fund operating expenses of the Fund after taking into account any such fee waiver and/or expense reimbursement. Net and gross expense ratios are as of the Fund’s most recent prospectus.

See 8 for additional performance disclosures. See page 79 for a description of all indices. See page 80 for a Glossary of Terms.

Credit ratings are assigned to underlying securities utilizing ratings from a Nationally Recognized Statistical Rating Organization (NRSRO) such as Moody’s and Fitch, or other rating agencies and applying the following hierarchy: security is determined to be Investment Grade if it has been rated at least BBB- by one credit rating agency; once determined to be Investment Grade (BBB- and above) or Non-Investment Grade (BB+ and below) where multiple ratings are available, then the lowest rating is assigned. Ratings are shown in the Fitch scale (e.g., AAA). Ratings and portfolio credit quality may change over time. The Fund itself has not been rated by a credit rating agency.

Income from municipal securities is generally free from federal taxes and state taxes for residents of the issuing state. While the interest income is tax-free, capital gains, if any, will be subject to taxes. Income for some investors may be subject to the federal Alternative Minimum Tax (AMT).

Source (Fixed Income Attributes, Credit Quality, and Maturity Distribution): Bloomberg Analytics

2023 Annual Report 21

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22 2023 Annual Report

PARTNERS III OPPORTUNITY FUND

Portfolio Managers: Wally Weitz, CFA & Drew Weitz

Investment Style: Multi-Cap Alternative

The Partners III Opportunity Fund’s Institutional Class returned +3.06% in the first quarter of 2023 compared to +7.18% for the Russell 3000. For the fiscal year ended March 31, 2023, the Fund’s Institutional Class returned -15.80% compared to -8.58% for the Russell 3000.

The March failure of Silicon Valley Bank and two additional financial institutions touched off a wave of concern across financial markets. Swift action by the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and Treasury Department guaranteed that depositors of those institutions would not lose money, but confidence was and remains shaken in all but the largest financial institutions. These challenges introduce yet another variable to the Fed’s inflation fighting formula; as banks repair their balance sheets, financial conditions will further tighten. Fearful of recession and having endured last year’s market declines, Wall Street has become even more adamant that the Fed should not only pause rate hikes now but move to cut them later this year. This widely held market consensus is squarely at odds with the Fed’s stated intentions, setting up a showdown for the foreseeable future. Regardless of who is right or wrong, what ultimately matters is how the businesses we own operate and adapt.

The portfolio holdings most directly impacted by the bank failures of the first quarter were Charles Schwab and Fidelity National Information Services (FIS), both top detractors for the quarter. Schwab is likely best known for its leading market trading platform, but over the years its consumer banking operations have grown into the tenth largest bank in the U.S. We believe both the trading and banking franchises remain strong, however, the current interest rate environment (particularly the availability of highly attractive yields in money market funds versus traditional deposits) has diminished the earnings power of the bank, at least in the short term. Given this uncertainty, we elected to move to the sidelines for now and free up capital for higher-conviction investment alternatives. Banking software provider FIS’s shares were also collateral damage as investors looked to shed any exposure to the small and regional banks that FIS serves. This, after several quarters of underwhelming operating results, lands FIS as our top detractor for the fiscal year period as well. Our FIS experience has been disappointing to be sure. But having re-underwritten our investment thesis and lowered our business value estimate, we believe investors have exacted too steep a penalty on FIS shares. From this lowered price, we are optimistic that new management can reestablish credibility with investors and unlock value through the planned separation of the banking software and merchant services businesses.

Beyond our financial holdings, Liberty SiriusXM’s quarterly declines were significant enough to land it on our quarterly detractors list. The company also joins Liberty Broadband on the detractors list for the fiscal year. Liberty Chairman John Malone and CEO Greg Maffei have a long, successful track record of pairing businesses with predictable and growing cash flow streams with prudent use of debt to enhance equity returns via share buybacks. SiriusXM and Charter Communications, the two primary operating entities of the Liberty holding companies, are two such examples. Lately, necessary operating investments (new satellites and streaming technology for Sirius, fiber-competitive speed upgrades and network expansions at Charter) have reduced the amount of capital available for repurchases. Investment cycles are not unusual, and both businesses will be better positioned afterward. We believe the long-term equity return potential remains intact. In the short term, we believe Liberty SiriusXM will also benefit from management’s decision to separate Liberty SiriusXM into two distinct tracking stocks to individually highlight the value of its ownership stakes of SiriusXM and Live Nation – currently both attributed to Liberty SiriusXM shares. This move will facilitate greater transparency for shareholders and potentially help reduce the shares’ discount to the market value of their underlying assets.

Although the first quarter saw some respite from 2022’s declines, the Fund’s short positions against market indices remained the top contributors to fiscal year. Meta Platforms’ “Year of Efficiency” (an initiative to restructure and improve financial performance) delivered a dramatic turnaround in its share price, recouping nearly all the losses from 2022. Delivering improved profitability in the near term is crucial, but we are encouraged for the long term by improving engagement trends and improved capabilities for advertisers in the aftermath of Apple’s iOS changes that damaged some of Meta’s ad targeting capabilities. Technology companies broadly delivered outsized gains in the quarter, including our holdings of Google parent Alphabet, Amazon. com, and Microsoft, each a top contributor to first quarter results. Notably, Microsoft’s timely addition to the portfolio during the fourth quarter was sufficient to drive a top result for the fiscal year.

We were net sellers during the first quarter. Schwab was the only holding to exit, and there were no new companies added to the portfolio. During the quarter, we covered the rest of our small short position in the shares of SiriusXM at a profit, while our short holdings of S&P 500 Index ETF remained unchanged. At quarter end, our gross long position declined to 92% from 98% of gross assets at the end of 2022, while our short position remained unchanged at 4% of gross assets. The Fund’s effective net long position declined from 94% to 88%.

Definitions: Effective net is the effective long (the sum of the portfolio’s long positions, such as common stocks, or derivatives where the price increases when an index or position rises) minus the effective short (the sum of the portfolio’s short positions, such as derivatives where the price increases when an index or position falls).

2023 Annual Report 23

Returns

All data as of 3/31/2023 unless otherwise indicated. Data quoted is past performance and current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. All investments involve risks, including possible loss of principal. Please visit weitzinvestments.com for the most recent month-end performance.

Investment results reflect applicable fees and expenses and assume all distributions are reinvested but do not reflect the deduction of taxes an investor would pay on distributions or share redemptions. Net and gross expense ratios are as of the Fund’s most recent prospectus.

See page 8 for additional performance disclosures. See page 79 for a description of all indices. See page 80 for a Glossary of Terms.

Contributions to performance are based on actual daily holdings. Returns shown are the actual quarterly returns of the security.

Source (Top Performers, Bottom Performers): Statpro

Source (Capitalization): Bloomberg Analytics

24 2023 Annual Report

PARTNERS VALUE FUND

Portfolio Managers: Wally Weitz, CFA, Brad Hinton, CFA & Drew Weitz

Investment Style: Multi-Cap Value

The Partners Value Fund’s Institutional Class returned +2.03% for the first quarter compared to +7.18% for the Russell 3000. For the fiscal year ended March 31, 2023, the Fund’s Institutional Class returned -11.81% compared to -8.58% for the Russell 3000.

The first quarter was generally a good one for stocks and other risk assets, though conditions were far from placid. The March failures of Silicon Valley Bank and Signature Bank set off a wave of concern across financial markets. While swift action by the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and Treasury Department ensured that depositors of those institutions would not lose money, confidence was shaken in all but the largest financial institutions. Please see this quarter’s “Value Matters” for our take on how the bank failures fit into the bigger picture.

At a minimum, the Fed’s inflation-fighting formula just became more complicated – as banks repair their balance sheets, financial conditions will further tighten. Fearful of recession and chastened by 2022’s market declines, Wall Street has become even more adamant that the Fed should pause rate hikes now and move to cut interest rates later this year. This widely held consensus view is squarely at odds with the Fed’s stated intentions, setting up a showdown that will keep things interesting for the foreseeable future. In our view, the case for owning durable, resilient, and adaptable businesses has never been stronger.

Meta Platforms, Alphabet, Guidewire Software, and Heico were the Fund’s largest quarterly contributors. Meta was the standout as the company’s “Year of Efficiency” (an initiative to restructure and improve financial performance) drove a dramatic stock price rebound from depressed levels. Meta continued to adapt to Apple’s iOS changes that had impaired its ad targeting capabilities. We are encouraged by the combination of solid engagement trends, enhanced tools for advertisers, and prudent expense management. First Republic Bank, Liberty SiriusXM, Charles Schwab, and CoStar Group were the Fund’s largest quarterly detractors. Financial stocks were particularly impacted as banking concerns flared.

LKQ, CoStar Group, Axalta Coating Systems, and IDEX were the Fund’s largest contributors for the fiscal year. The Fund’s industrial stocks held up much better than the broader market as the economy remained resilient despite mounting pressures. First Republic Bank, Liberty SiriusXM, Alphabet, and Liberty Broadband were the Fund’s most significant detractors for the fiscal year.

Necessary capital investment cycles at Liberty Sirius XM (new satellites and streaming technology) and Liberty Broadband (fiber-competitive speed upgrades and network expansions at Charter Communications) disappointed investors looking for quick wins. The spending will no doubt crowd out some share repurchases in the short run. Still, we think these investments are prudent and should bolster the businesses’ competitive positions with acceptable returns, and we remain confident in the long-term potential of both stocks.

We sold the Fund’s First Republic position at a substantial loss. Our team rightly had questions about some of First Republic’s recent balance sheet choices, but we also thought the company’s relationship banking model would help shelter its historically sticky deposit base. We simply were not imaginative enough about the possibility of a bank run, sparked and fueled by severe problems at a different bank. As confidence eroded and deposits fled, the company quickly lost control of its destiny. We sold the stock in the high $30s, which was suboptimal but kept a bad outcome from becoming even worse.

We also exited the Fund’s Charles Schwab position, for different reasons. Our concerns were primarily related to the depth and length of a potential earnings valley. As the Fed pushed up short-term interest rates, money market funds and Treasury bills provided savers with clear alternatives to banks’ ultra-low yielding deposits. Schwab’s near-term cost of funding seemed likely to rise materially, one way or the other. Some earnings erosion is reflected in the stock price, but we sold as our view of the risk/ reward framework shifted considerably. Unlike First Republic, Schwab was an exceptional contributor to Fund returns over the past three years.

With the reorganization of the Hickory Fund into Partners Value in late March, we welcomed several new companies – and shareholders – to the Fund. New portfolio holdings included ACI Worldwide (payments software), Dolby Laboratories (audio signal processing), Ingersoll-Rand (flow control equipment), LICT Corporation (rural telecom), Live Nation (concerts & ticketing), and Perimeter Solutions (fire retardants). This diverse collection of businesses adds breadth to the portfolio, increases the Fund’s exposure to mid-cap stocks, and offers differentiated return potential.

After a disappointing fiscal year where much of the economic pain was front-loaded, we are optimistic about the prospects for the next several years. We see outsized return potential from a handful of beaten-down stocks like Liberty SiriusXM, CarMax, and Liberty Broadband, along with some other companies whose valuations have reset to discounted levels, especially in the mid-cap area. We think the Fund’s companies will continue to adapt and find ways to grow business value over the 2023 to 2025 timeframe. Over time, we believe value growth will ultimately outweigh any short-term trading noise for patient investors.

We believe that investing in businesses of all sizes, using our Quality at a Discount framework, is an enduring advantage of a multi-cap strategy. Valuation remains our North Star, and we think our stocks are priced at healthy discounts to business value. Our current estimate is that the portfolio trades at a price-to-value in the mid 70s – a level that suggests ample long-term return potential from both our mid- and large-cap holdings.

2023 Annual Report 25

All data as of 3/31/2023 unless otherwise indicated. Data quoted is past performance and current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. All investments involve risks, including possible loss of principal. Please visit weitzinvestments.com for the most recent
month-end performance.

Investment results reflect applicable fees and expenses and assume all distributions are reinvested but do not reflect the deduction of taxes an investor would pay on distributions or share redemptions. The Fund has entered into fee waiver and/or expense reimbursement arrangements with the Investment Advisor by which the Advisor has contractually agreed to waive a portion of the Advisor’s fee and reimburse certain expenses (excluding taxes, interest, brokerage costs, acquired fund fees and expenses and extraordinary expenses)to limit the total annual fund operating expenses of the Fund’s average daily net assets through 07/31/2023. If this arrangement had not been in place, the performance results would have been lower. The net expense ratio reflects the total annual fund operating expenses of the Fund after taking into account any such fee waiver and/or expense reimbursement. Net and gross expense ratios are as of the Fund’s most recent prospectus.

See page 8 for additional performance disclosures. See page 79 for a description of all indices.

See page 80 for a Glossary of Terms. Contributions to performance are based on actual daily holdings. Returns shown are the actual quarterly returns of the security.

Source (Top Performers, Bottom Performers): Statpro

Source (Capitalization): Bloomberg Analytics

26 2023 Annual Report

SHORT DURATION INCOME FUND

Portfolio Managers: Tom Carney, CFA & Nolan Anderson

Investment Style: Short-Term Bond

The Short Duration Income Fund’s Institutional Class returned +1.97% in the first quarter compared to a +1.51% return for the Bloomberg U.S. Aggregate 1-3 Year Index. For the fiscal year ended March 31, 2023, the Fund’s Institutional Class returned +0.98% compared to a +0.24% return for the index. Given the investment challenges of the past year, we are pleased to report positive absolute results for the quarter and fiscal year – and good relative results.

Despite the dizzying ups and downs of an extremely volatile first quarter, fixed income investors generally posted solid gains (our Fund included), riding the strong performance of U.S. Treasury bonds (as they often do). Price gains for bonds in January resulting from weak economic data fueled speculation of a Fed pivot, or at least a pause, in its year-long pursuit of higher short-term interest rates to slow inflation. February brought a ‘blowout’ jobs report that undermined any thoughts of a slowdown and resulted in a violent reversal of January’s interest rate rally (as rates decrease, bond prices increase). By early March, the yield curve had reached its deepest inversion (the difference between 2-year and 10-year U.S. Treasury rates) in over 40 years.

Recession fears eased and pundits began to believe the economy could grow despite the Fed’s efforts to tame inflation. Then came the collapse of Silicon Valley Bank (and others) and overall turmoil in the banking industry. Rates plummeted during the final stretch of the first quarter in a classic flight to safety amid growing worries about tightening lending conditions and the attendant effects on future economic growth. ‘Pause’ or ‘pivot’ has been replaced by market expectations of rate cuts later this year. Overall, the first quarter of 2023 had echoes of 2022. Instead of calm after a tumultuous year, investors have received more volatility and choppy markets. However, overall forward returns in fixed income (tax-free and taxable) are where the echoes/comparisons end. For the first time in seemingly forever, forward (coupon) returns compensate for this year’s volatile/ choppy markets where the higher overall yield environment presents a much wider range of attractive investment opportunities for fixed-income investors.

Whether the Fed does pause or pivot in its battle against inflation, we have been active in improving the forward return prospects for the Short Duration Fund. By design, the Fund has the distinct feature of having about a quarter of its holdings paydown or mature in any given year. This allows us to reinvest proceeds into today’s improved forward-return environment. Part of this improvement can be seen in the Fund’s improved yield-to-worst (YTW) metric. As a reminder, YTW has historically been a reasonable predictor of forward returns. The Fund’s YTW increased from 2.72% on March 31, 2022, to 5.86% on March 31, 2023 – comparing favorably to the index’s YTW of 4.46% as of March 31 (see table below). As important, or perhaps more so, the difference of percentage change between the Fund’s and the index’s YTW has widened over the past year, principally due to asset/security selection and the ability to reinvest maturities/ paydowns mentioned above into a rising rate environment.

The chart below provides a longer-term view (10-year) of the Short Duration Income Fund’s forward return prospects, or yield-to-worst (YTW). Until the first quarter of 2022 (right-hand side of the bar chart below), the Fund’s YTW had never breached 4%. It has now exceeded 5.5% for three consecutive quarters. Given the 10-year average of 2.3% of the time series below, today’s forward return prospects as measured by a YTW of 5.86% on March 31, 2023, reinforce comments we made in the 2022 year-end Fixed Income Insights (Bonds’ ‘Great Reset’ and the Return of Income), that we remain particularly optimistic about the role fixed-income has in an overall asset allocation framework.

Portfolio Positioning

The table below shows the change in allocation to various sectors, from the prior quarter and from the prior year. This summary provides a view over time of how we have allocated capital. Since our goal is to invest in sectors that we believe offer the best risk-adjusted returns, our allocations may change significantly over time.

*Corporate CLOs are included in the ABS segment in the Fund’s schedule of investments but are additionally called out separately for the purposes of the discussion.

**High-Yield exposure (as of 3/31/2023) consists of investments in the Corporate, Corporate Convertible, ABS and CMBS sectors.

Totals may be greater or less than 100 due to rounding.

2023 Annual Report 27

Investment activity remained strong in the first quarter as we sourced a little more than $90 million in new investments for the Fund. This helped offset the typical (and by-design) feature of monthly/quarterly paydowns and maturities of securities (approximately $80 million in the first quarter). As mentioned, about a quarter of the Fund’s holdings paydown or mature in any given year allowing us to frequently reinvest investor capital into areas of the fixed-income market that we believe provide the best current relative value opportunities. While this continuous reinvestment has been an occasional headwind as rates fell to near-historic lows in recent years, we believe it has and will continue to provide return upside from the rapid increase in interest rates over the past year.

Noteworthy additions in the first quarter included:

Noteworthy reductions (sales) in the first quarter:

In terms of overall portfolio metrics, from December 31, 2022, to March 31, 2023, average effective maturity decreased from 3.6 to 2.9 years, and average effective duration stayed steady at 1.5 years. These measures provide a guide to the Fund’s interest rate sensitivity. A higher average effective maturity and longer average effective duration increase the Fund’s price sensitivity to changes in interest rates (either up or down). Another portfolio attribute to highlight is the Fund’s investments in floating-rate securities (mainly middle-market CLOs and CRE CLOs). As of March 31, 2023, more than 22% of Fund assets were represented by floating-rate securities. We don’t invest based on any wager that the Fed will raise short-term interest rates – as each investment is vetted based on its individual merits (relative risk/ reward) and the expected future nominal return contributions each can make to the Fund. However, we believe the Fund’s exposure to floating rate investments has provided coupon income upside as the Fed has moved away from its near-decade-long zero-interest-rate policy (ZIRP).

Top Quarterly Contributors

Top Quarterly Detractors

Fiscal year results

Fiscal year results were aided by the Fund’s CLO (both middle-market and commercial real estate), ABS, and select corporate bond investments in the retail segment. Noteworthy fiscal year detractors included non-agency mortgage-backed securities and U.S. Treasury securities.

Fund Strategy

Our approach consists primarily of investing in a diversified portfolio of high-quality bonds while maintaining an overall portfolio average effective duration of 1.0 to 3.5 years. We may invest up to 15% in fixed income securities that are not considered investment grade (such as high yield and convertible bonds), and we do so when we perceive the risk/reward characteristics to be favorable.

We do not, and will not, try to mimic any index as we construct our portfolio. We believe our flexible mandate is a differentiator that allows us to navigate any environment. The last few years have reinforced our conviction about the strength of our flexible mandate. We utilize a bottom-up, research-driven approach and select portfolio assets one security at a time based on our view of opportunities in the marketplace. Our fixed income research is not dependent on, but often benefits from, the due diligence efforts our equity teammates conduct on companies and industries.

28 2023 Annual Report

Overall, we strive to be adequately compensated for the risks
assumed while seeking to maximize investment (or reinvestment)
income and avoid making interest-rate bets, particularly ones that
depend on interest rates going down.

Our goal is to (a) preserve capital, (b) maintain a strong liquidity
position, (c) understand evolving risks and opportunities,
(d) conduct consistent/thorough credit surveillance, and (e)
selectively take advantage of favorable risk/reward opportunities.
We remain ready to take advantage of any further valuation
disparities that may develop and will strive to continue to earn
your trust.

Definitions: Average effective duration provides a measure of a fund’s
interest-rate sensitivity. The longer a fund’s duration, the more sensitive
the fund is to shifts in interest rates. Average effective maturity is
the weighted average of the maturities of a fund’s underlying bonds.
Investment Grade Bonds are those securities rated at least BBB-. Non-
Investment Grade Bonds are those securities (commonly referred to as
“high yield” or “junk” bonds) rated BB+ and below. Middle market refers
to smaller companies, generally with earnings before interest, taxes,
and amortization of generally less than $75 million. Yield to worst (YTW)
is the lowest potential yield that can be received on a bond portfolio
without the underlying issuers defaulting.

2023 Annual Report 29

Returns

All data as of 3/31/2023 unless otherwise indicated. Data quoted is past
performance and current performance may be lower or higher. Past
performance is no guarantee of future results. Investment return and principal
value of an investment will fluctuate, and shares, when redeemed, may be
worth more or less than their original cost. All investments involve risks, including
possible loss of principal. Please visit weitzinvestments.com for the most recent
month-end performance.

Investment results reflect applicable fees and expenses and assume all
distributions are reinvested but do not reflect the deduction of taxes an investor
would pay on distributions or share redemptions. The Fund has entered into
fee waiver and/or expense reimbursement arrangements with the Investment
Advisor by which the Advisor has contractually agreed to waive a portion of
the Advisor’s fee and reimburse certain expenses (excluding taxes, interest,
brokerage costs, acquired fund fees and expenses and extraordinary expenses)
to limit the total annual fund operating expenses of the Fund’s average daily
net assets through 07/31/2023. If this arrangement had not been in place, the
performance results would have been lower. The net expense ratio reflects the
total annual fund operating expenses of the Fund after taking into account any
such fee waiver and/or expense reimbursement. Net and gross expense ratios
are as of the Fund’s most recent prospectus.
See page 8 for additional performance disclosures. See page 79 for a
description of all indices. See page 80 for a Glossary of Terms.

Credit ratings are assigned to underlying securities utilizing ratings from a
Nationally Recognized Statistical Rating Organization (NRSRO) such as Moody’s
and Fitch, or other rating agencies and applying the following hierarchy: security
is determined to be Investment Grade if it has been rated at least BBB- by
one credit rating agency; once determined to be Investment Grade (BBB- and
above) or Non-Investment Grade (BB+ and below) where multiple ratings are
available, then the lowest rating is assigned. Mortgage-related securities issued
and guaranteed by government-sponsored agencies such as Fannie Mae and
Freddie Mac are generally not rated by rating agencies. Securities that are not
rated do not necessarily indicate low quality. Ratings are shown in the Fitch scale
(e.g., AAA). Ratings and portfolio credit quality may change over time. The Fund
itself has not been rated by a credit rating agency.

Source (Fixed Income Attributes, Credit Quality, and Maturity Distribution):
Bloomberg Analytics

30 2023 Annual Report

ULTRA SHORT GOVERNMENT FUND

Portfolio Managers: Tom Carney, CFA & Nolan Anderson

Investment Style: Ultra-Short-Term Bond

The Ultra Short Government Fund returned +1.17% in the first quarter, equaling the return for the ICE BofAML US 6-Month Treasury Bill Index (6-Month Treasury). For the fiscal year ended March 31, 2023, the Fund returned +2.41% compared to a +2.61% return for the index.

Overview

Short-term investors (our Fund included) experienced solid returns in the first quarter as the Fed’s year-long mission to slow inflation by hiking short-term interest rates has left nominal returns meaningfully higher. A year ago, short-term investors were still suffering a return drought brought about by nearly 10 years of the Fed’s zero-interest-rate policy (ZIRP). Three-month Treasury bills, for example, returned just 0.5% on March 31, 2022. Fast forward to March 31, 2023, and three-month Treasury bills yielded (had a forward return) of nearly 5%.

The Fed continued to tighten (increase) short-term interest rates in the first quarter at its meetings in February and March. The pace of rate increases at each meeting slowed to 0.25% and brought the federal funds rate to a range of 4.75% (lower bound) to 5% (upper bound). The collapse of Silicon Valley Bank (and others) and overall turmoil in the banking industry resulted in increased worries about tightening lending conditions and its attendant effects on future economic growth. Speculation of a ‘pause’ by the Fed in its interest rate hiking campaign has been replaced by market expectations of rate cuts later this year. Overall, the first quarter of 2023 had echoes of 2022. Instead of calm after a tumultuous 2022, investors have received more volatility and choppy markets. However, overall forward returns in fixed income are where the echoes/comparisons end. For the first time in seemingly forever, forward (coupon) returns mentioned above compensate for this year’s volatile/choppy markets.

The Federal Reserve’s monetary policy decisions (e.g., changes in short-term interest rates) will continue to affect all investments within our opportunity set. As a result, our yield and return will invariably follow the path dictated by the Fed’s monetary policy, as we frequently reinvest maturities with holdings that mature in a short period of time. As of March 31, 2023, 72.7% of our portfolio was invested in U.S. Treasury notes, 6.2% in investment-grade asset-backed securities, and 21.1% in cash and cash equivalents. The average effective duration was unchanged from December 31, 2022, to March 31, 2023, at 0.3 years. The Fund’s 30-day yield increased approximately 39 basis points during the quarter to 4.38% as of March 31.

Under normal market conditions, the Fund will invest at least 80% of its net assets in obligations issued or guaranteed by the U.S. government and its government-related entities. The balance of Fund assets may be invested in U.S. investment-grade debt securities. Given the bank tumult of the first quarter, it’s reasonable to assert that current market conditions are not normal. Consequently, at this time we intend to have an even higher percentage weighting in U.S. Treasury-related securities to increase already strong liquidity and quality measures. As securities mature, and as new investors join the Fund, we may concentrate incremental investments in U.S. Treasury-related securities. This abundance of caution is currently warranted but will change once we believe that stress levels in the banking system have eased.

Additionally, the Fund will maintain an average effective duration of one year or less. Duration is a measure of how sensitive the portfolio may be to changes in interest rates. All else being equal, a lower-duration bond portfolio is less sensitive to changes in interest rates than a bond portfolio with a higher duration. Over time, this shorter-term focus (duration of less than one year) is intended to generate higher total returns than cash or money market funds, while also taking less interest rate risk than a bond portfolio with a higher duration.

Definitions: 30-Day SEC Yield represents net investment income earned by a fund over a 30-day period, expressed as an annual percentage rate based on the Fund’s share price at the end of the 30-day period. Subsidized yield reflects fee waivers and/or expense reimbursements during the period. Without such fee waivers and/or expense reimbursements, if any; yields would have been lower. Unsubsidized yield does not adjust for any fee waivers and/or expense reimbursement in effect. Average effective duration provides a measure of a fund’s interest-rate sensitivity. The longer a fund’s duration, the more sensitive the fund is to shifts in interest rates. Investment Grade Bonds are those securities rated at least BBB- by one or more credit ratings agencies. Non-Investment Grade Bonds are those securities (commonly referred to as “high yield” or “junk” bonds) rated BB+ and below by one or more credit ratings agencies.

2023 Annual Report 31

Returns

All data as of 3/31/2023 unless otherwise indicated. Data quoted is past performance and current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. All investments involve risks, including possible loss of principal. Please visit weitzinvestments.com for the most recent month-end performance.

Investment results reflect applicable fees and expenses and assume all distributions are reinvested but do not reflect the deduction of taxes an investor would pay on distributions or share redemptions. The Fund has entered into fee waiver and/or expense reimbursement arrangements with the Investment Advisor by which the Advisor has contractually agreed to waive a portion of the Advisor’s fee and reimburse certain expenses (excluding taxes, interest, brokerage costs, acquired fund fees and expenses and extraordinary expenses) to limit the total annual fund operating expenses of the Fund’s average daily net assets through 07/31/2023. If this arrangement had not been in place, the performance result would have been lower. The net expense ratio reflects the total annual fund operating expenses of the Fund after taking into account any such fee waiver and/or expense reimbursement. Net and gross expense ratios are as of the Fund’s most recent prospectus.

See page 8 for additional performance disclosures. See page 79 for a description of all indices. See page 80 for a Glossary of Terms.

Credit ratings are assigned to underlying securities utilizing ratings from a Nationally Recognized Statistical Rating Organization (NRSRO) such as Moody’s and Fitch, or other rating agencies and applying the following hierarchy: security is determined to be Investment Grade if it has been rated at least BBB- by one credit rating agency; once determined to be Investment Grade (BBB- and above) or Non-Investment Grade (BB+ and below) where multiple ratings are available, then the lowest rating is assigned. Ratings are shown in the Fitch scale (e.g., AAA). Ratings and portfolio credit quality may change over time. The Fund itself has not been rated by a credit rating agency.

Source (Fixed Income Attributes, Credit Quality, and Maturity Distribution): Bloomberg Analytics

32 2023 Annual Report

VALUE FUND

Portfolio Manager: Brad Hinton, CFA

Investment Style: Large-Cap Value

The Value Fund’s Institutional Class returned +6.05% for the first quarter compared to +7.46% for the Russell 1000. For the fiscal year ended March 31, 2023, the Fund’s Institutional Class returned -10.88% compared to -8.39% for the Russell 1000.

On balance, it was a reasonable quarter for the Fund. Solid absolute returns were welcome after a tough year. Several stocks that had been laggards in 2022 rebounded nicely. A few new issues cropped up along the way, which we addressed head-on. Relative results were not yet back to our standards, as more aggressive growth stocks not held in the Fund drove the broader indexes.

Despite widespread positive returns, conditions were far from placid. The March failures of Silicon Valley Bank and Signature Bank set off a wave of concern across financial markets. While swift action by the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and Treasury Department ensured that depositors of those institutions would not lose money, confidence was shaken in all but the largest financial institutions. Please see this quarter’s “Value Matters” for our take on how the bank failures fit into the bigger picture.

At a minimum, the Fed’s inflation-fighting formula just became more complicated – as banks repair their balance sheets, financial conditions will further tighten. Fearful of recession and chastened by 2022’s market declines, Wall Street has become even more adamant that the Fed should pause rate hikes now and move to cut interest rates later this year. This widely held consensus view is squarely at odds with the Fed’s stated intentions, setting up a showdown that will keep things interesting for the foreseeable future. In our view, the case for owning durable, resilient, and adaptable businesses has never been stronger.

The Fund’s technology-related stocks were the largest quarterly contributors, with Meta Platforms, Salesforce, Alphabet, and Analog Devices pacing the gains. Meta was the standout as the company’s “Year of Efficiency” (an initiative to restructure and improve financial performance) drove a dramatic stock price rebound from depressed levels. Meta continued to adapt to Apple’s iOS changes that had impaired its ad targeting capabilities. We are encouraged by the combination of solid engagement trends, enhanced tools for advertisers, and prudent expense management. Charles Schwab, Liberty SiriusXM, Fidelity National Information Services (FIS), and CoStar Group were the Fund’s largest quarterly detractors.

We sold the Fund’s Schwab position in March. Our concerns were primarily related to the depth and length of a potential earnings valley. As the Fed pushed up short-term interest rates, money market funds and Treasury bills provided savers with clear alternatives to banks’ ultra-low yielding deposits. Schwab’s near-term cost of funding seemed likely to rise materially, one way or the other. Some earnings erosion is reflected in the stock price, but we sold as our view of the risk/reward framework shifted considerably. While our final exit price was well below the highs, Schwab was an exceptional contributor to Fund returns over the past three years.

Analog Devices, Oracle, CoStar Group, and Meta Platforms were the Fund’s largest contributors for the fiscal year. Analog Devices and Oracle delivered strong business results with few surprises, while timely buying and selling helped boost CoStar and Meta onto the leaderboard. Liberty Broadband, Alphabet, FIS, and Liberty SiriusXM were the largest detractors for the Fund’s fiscal year.

Necessary capital investment cycles at Liberty Sirius XM (new satellites and streaming technology) and Liberty Broadband (fiber-competitive speed upgrades and network expansions at Charter Communications) disappointed investors looking for quick wins. The spending will no doubt crowd out some share repurchases in the short run. Still, we think these investments are prudent and should bolster the businesses’ competitive positions with acceptable returns, and we remain confident in the long-term potential of both stocks.

We sold over half of the Fund’s FIS position after the company announced the planned spin-off of the merchant business. These sales generated a capital loss, which will help offset realized gains elsewhere. Our original investment thesis has changed, triggering another deep review of the company and stock. Our plan is to either rebuild a core position size or exit the stock entirely after we clear the 30-day “wash sale” period. We also added to the Fund’s holdings of Accenture and Liberty SiriusXM in March at attractive price levels.

The portfolio is focused and well-aligned with our vision for successful large-cap investing. We have concentrated ownership stakes in 25 companies, with the top ten representing over half of the portfolio. Each position is significant enough to matter, yet none can individually make or break our results. Our current estimate is that the portfolio trades at a price-to-value in the mid 70s, though these estimates remain more fluid than usual. We believe that many holdings have a chance for healthy gains over a multi-year period. Others are priced for adequate return potential primarily from expected growth in per-share business value.

2023 Annual Report 33

Returns

All data as of 3/31/2023 unless otherwise indicated. Data quoted is past performance and current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. All investments involve risks, including possible loss of principal. Please visit weitzinvestments.com for the most recent month-end performance.

Investment results reflect applicable fees and expenses and assume all distributions are reinvested but do not reflect the deduction of taxes an investor would pay on distributions or share redemptions. The Fund has entered into fee waiver and/or expense reimbursement arrangements with the Investment Advisor by which the Advisor has contractually agreed to waive a portion of the Advisor’s fee and reimburse certain expenses (excluding taxes, interest, brokerage costs, acquired fund fees and expenses and extraordinary expenses) to limit the total annual fund operating expenses of the Fund’s average daily net assets through 07/31/2023. If this arrangement had not been in place, the performance results would have been lower. The net expense ratio reflects the total annual fund operating expenses of the Fund after taking into account any such fee waiver and/or expense reimbursement. Net and gross expense ratios
are as of the Fund’s most recent prospectus.

See page 8 for additional performance disclosures. See page 79 for a description of all indices. See page 80 for a Glossary of Terms.

Contributions to performance are based on actual daily holdings. Returns shown are the actual quarterly returns of the security.

Source (Top Performers, Bottom Performers): Statpro

Source (Capitalization): Bloomberg Analytics

34 2023 Annual Report

BALANCED FUND
Schedule of Investments
March 31, 2023

The accompanying notes form an integral part of these financial statements.

2023 Annual Report 35

The accompanying notes form an integral part of these financial statements.