Sequoia Fund, Inc.   767 Fifth Avenue, Suite 4701
New York, NY 10153
(800) 686-6884

QUARTERLY REPORT
For the Period Ended March 31, 2013

To the Shareholders of Sequoia Fund, Inc.:

As of this writing, the Sequoia Fund is up 15.07% year-to-date versus 18.02% for the S&P 500 Index.

Based on activity to the date of this letter, the capital gains distribution will be approximately $1.49 per share and would be distributed in November. We will do our best to keep you informed of any material changes due to sales activity through October 31, 2013. IRS regulations dictate that capital gain distributions are determined by transactions from November 1 of one year to October 31 of the following year.

Sincerely,

   
[GRAPHIC MISSING]   [GRAPHIC MISSING]   [GRAPHIC MISSING]
Richard T. Cunniff
Vice Chairman
  Robert D. Goldfarb

President
  David M. Poppe
Executive Vice President

May 22, 2013


 
 

FUND PERFORMANCE

Sequoia Fund's results for the first quarter of 2013 are shown below with comparable results for the S&P 500 Index:

   
To March 31, 2013     Sequoia
Fund
      Standard &
Poor's 500
 
3 Months     10.77 %      10.61 % 
1 Year     15.69 %      13.96 % 
5 Years (Annualized)     8.94 %      5.81 % 
10 Years (Annualized)     9.36 %      8.53 % 

The performance shown above represents past performance and does not guarantee future results. The table does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Current performance may be lower or higher than the performance information shown.

The S&P 500 Index is an unmanaged, capitalization-weighted index of the common stocks of 500 major US corporations. The performance data quoted represents past performance and assumes reinvestment of distributions. The investment return and principal value of an investment in the Fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Year to date performance as of the most recent month end can be obtained by calling DST Systems, Inc. at (800) 686-6884.



 

FEES AND EXPENSES OF THE FUND
(UNAUDITED)

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

Shareholder Fees (fees paid directly from your investment)

The Fund does not impose any sales charges, exchange fees or redemption fees.

Annual Fund Operating Expenses (expenses that are deducted from Fund assets)

Annual Fund Operating Expenses

 
Management Fees     1.00 % 
Other Expenses     0.03 % 
Total Annual Fund Operating Expenses*     1.03 % 
* Does not reflect Ruane, Cunniff & Goldfarb Inc.'s (“Ruane, Cunniff & Goldfarb”) contractual reimbursement of a portion of the Fund’s operating expenses. This reimbursement is a provision of Ruane, Cunniff & Goldfarb’s investment advisory agreement with the Fund and the reimbursement will be in effect only so long as that investment advisory agreement is in effect. For the year ended December 31, 2012, the Fund’s annual operating expenses net of such reimbursement was 1.00%.


 
 

 

SEQUOIA FUND, INC.
SCHEDULE OF INVESTMENTS
MARCH 31, 2013 (UNAUDITED)

COMMON STOCKS (84.19%)

   
Shares     Value (a)
       ADVERTISING (0.84%)           
932,215     Omnicom Group Inc.     $ 54,907,463  
       AEROSPACE/DEFENSE (7.08%)           
945,856     Precision Castparts Corp.       179,353,215  
23,123,314     Qinetiq Group plc (United Kingdom)       72,861,562  
12,355,869     Rolls-Royce Group plc (United Kingdom)       212,100,847  
             464,315,624  
       AUTO PARTS (5.74%)           
2,495,910     Advance Auto Parts, Inc.       206,286,961  
1,656,139     O’Reilly Automotive Inc. (b)       169,837,054  
             376,124,015  
       BIOTECHNOLOGY (1.08%)           
2,072,704     Novozymes A/S – B Shares (Denmark)       70,726,879  
       CONSTRUCTION EQUIPMENT (0.50%)           
1,518,248     Ritchie Bros. Auctioneers Incorporated       32,945,982  
       CRUDE OIL & GAS PRODUCTION (0.09%)           
179,214     Canadian Natural Resources Limited       5,758,146  
       DENTAL EQUIPMENT (1.41%)           
1,254,944     Sirona Dental Systems Inc. (b)       92,527,021  
       DIVERSIFIED COMPANIES (11.27%)           
3,183     Berkshire Hathaway Inc. – Class A (b)       497,439,240  
2,317,092     Berkshire Hathaway Inc. – Class B (b)       241,440,986  
             738,880,226  
       DIVERSIFIED MANUFACTURING (0.73%)           
764,411     Danaher Corporation       47,508,144  
       ELECTRICAL & MECHANICAL SYSTEMS (0.50%)           
774,451     EMCOR Group Inc.       32,828,978  
       ELECTRONIC MANUFACTURING SERVICES (0.58%)           
1,274,610     Trimble Navigation Limited (b)       38,187,316  
       FLOORING PRODUCTS (4.42%)           
2,562,554     Mohawk Industries Inc. (b)       289,876,108  
       FREIGHT TRANSPORTATION (0.10%)           
191,146     Expeditors International Inc.       6,825,824  
       GLASS TECHNOLOGY (0.37%)           
1,808,436     Corning Inc.       24,106,452  
       HEALTHCARE (14.13%)           
528,934     Perrigo Company       62,800,334  
11,320,000     Valeant Pharmaceuticals International Inc. (b)       849,226,400  
220,297     West Pharmaceutical Services, Inc.       14,306,087  
             926,332,821  
       INDUSTRIAL & CONSTRUCTION SUPPLIES (5.43%)           
6,939,397     Fastenal Company       356,338,036  
       INDUSTRIAL GASES (1.17%)           
687,535     Praxair, Inc.       76,687,654  


 
 

   
Shares     Value (a)
       INDUSTRIAL MACHINERY (1.20%)           
4,014,171     IMI plc (United Kingdom)     $ 78,966,772  
       INFORMATION PROCESSING (2.46%)           
298,457     MasterCard Inc.       161,504,036  
       INSURANCE BROKERS (0.55%)           
1,122,991     Brown & Brown Inc.       35,980,632  
       INTERNET SOFTWARE & SERVICES (1.96%)           
162,006     Google Inc. – Class A (b)       128,637,624  
       INVESTMENT BANKING & BROKERAGE (0.98%)           
434,287     The Goldman Sachs Group Incorporated       63,905,332  
       IT CONSULTING & OTHER SERVICES (1.55%)           
477,000     International Business Machines Corp.       101,744,100  
       PRECISION INSTRUMENTS (1.20%)           
840,323     Waters Corporation (b)       78,914,733  
       PROPERTY AND CASUALTY INSURANCE (0.82%)           
31,149     Admiral Group plc (United Kingdom)       630,269  
6,227,033     Hiscox Ltd. (United Kingdom)       52,026,861  
20,965     Verisk Analytics, Inc. – Class A (b)       1,292,073  
             53,949,203  
       RENEWABLE ENERGY (0.08%)           
93,719     First Solar, Inc. (b)       2,526,664  
99,622     SMA Solar Technology AG (Germany)       2,384,453  
             4,911,117  
       RETAILING (9.32%)           
39,600     Costco Wholesale Corporation       4,201,956  
851,605     Tiffany & Co.       59,220,612  
10,268,380     TJX Companies, Inc.       480,046,765  
903,180     Wal-Mart Stores, Inc.       67,584,959  
             611,054,292  
       SEMICONDUCTORS (0.04%)           
68,450     Linear Technology Corporation       2,626,426  
       SPECIALTY CHEMICALS (0.97%)           
1,532,299     Croda International plc (United Kingdom)       63,849,367  
       TRANSPORTATION SERVICES (1.97%)           
3,255,448     World Fuel Services Corp.       129,306,395  
       VETERINARY DIAGNOSTICS (2.79%)           
1,980,485     Idexx Laboratories Inc. (b)       182,977,009  
       Miscellaneous Securities (2.86%) (c)       187,629,686  
       TOTAL COMMON STOCKS (COST $2,363,814,303)     $ 5,520,833,413  


 
 

U.S. GOVERNMENT OBLIGATIONS (15.75%)

   
Principal Amount     Value (a)
$1,033,000,000
 
    U.S. Treasury Bills, 0.027% - 0.030%
  due 4/25/2013 through 5/23/2013
    $ 1,032,949,826  
       TOTAL U.S. GOVERNMENT OBLIGATIONS
  (COST $1,032,949,826)
    $ 1,032,949,826  
       TOTAL INVESTMENTS (99.94%)
  (COST $ 3,396,764,129) ++
    $ 6,553,783,239  

SUMMARY

   
Common Stocks     84.19 %    $ 5,520,833,413  
U.S. Government Obligations     15.75 %      1,032,949,826  
Net Cash & Receivables     0.06 %      3,866,432  
Net Assets   $ 6,557,649,671  
Number of Shares Outstanding     35,173,921  
Net Asset Value Per Share   $ 186.43  
++ The cost for federal income tax purposes is identical. At March 31, 2013 the aggregate gross tax basis unrealized appreciation and depreciation of securities were $3,193,280,176 and $36,261,066 respectively.
(a) Securities traded on a national securities exchange are valued at the last reported sales price on the principal exchange on which the security is listed on the last business day of the period; securities traded in the over-the-counter market are valued in accordance with NASDAQ Official Closing Price on the last business day of the period; securities traded in the over-the-counter market and listed securities for which no sale was reported on that date are valued at the mean between the last reported bid and asked prices.

Securities traded on a foreign exchange are valued at the Official Closing Price on the last business day of the period on the principal exchange on which the security is primarily traded. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at the close of the New York Stock Exchange on that day.

U.S. Treasury Bills with remaining maturities of sixty days or less are valued at their amortized cost. U.S. Treasury Bills that when purchased have a remaining maturity in excess of sixty days are stated at their discounted value based upon the mean between the bid and asked discount rates until the sixtieth day prior to maturity, at which point they are valued at amortized cost.

When reliable market quotations are insufficient or not readily available at time of valuation or when the Investment Adviser determines that the prices or values available do not represent the fair value of a security, such security is valued as determined in good faith by the Investment Adviser, in conformity with guidelines adopted by and subject to review by the Board of Directors.

Purchases and sales of foreign portfolio securities are translated into U.S. dollars at the rates of exchange prevailing when such securities are acquired or sold.

(b) Non-income producing.
(c) “Miscellaneous Securities” include holdings in their initial period of acquisition that have not previously been publicly disclosed.

Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below:

Level 1 –  quoted prices in active markets for identical securities
Level 2 –  other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
Level 3 –  significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)


 
 

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. During the period ended March 31, 2013, there were no significant transfers into and out of Level 1 and 2 measurements in the fair value hierarchy.

The following is a summary of the inputs used to value the Fund’s investments as of March 31, 2013:

     
Valuation Inputs   Common Stocks   U.S. Government Obligations   Total

Level 1 – 

Quoted Prices

  $ 5,520,833,413              $ 5,520,833,413  

Level 2 – 

Other Significant Observable Inputs

        $ 1,032,949,826       1,032,949,826  
Total   $ 5,520,833,413     $ 1,032,949,826     $ 6,553,783,239  


 

Other information

Please consider the investment objectives, risks and charges and expenses of the Fund carefully before investing. The Fund's prospectus contains this and other information about the Fund. You may obtain year to date performance as of the most recent month end, and a copy of the prospectus by calling 1-800-686-6884, or on the Fund’s website at http://www.sequoiafund.com. Please read the prospectus carefully before investing.

Shares of the Fund are offered through the Fund’s distributor, Ruane, Cunniff & Goldfarb LLC. Ruane, Cunniff & Goldfarb LLC is an affiliate of Ruane, Cunniff & Goldfarb Inc. and is a member of FINRA. An investment in the Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

The Fund may be offered only to persons in the United States and by way of a prospectus. This should not be considered a solicitation or offering of any product or service to investors residing outside of the United States.

The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Form N-Q is available on the SEC's web site at http://www.sec.gov. The Fund's Form N-Q may also be reviewed and copied at the SEC's Public Reference Room in Washington, DC. For information regarding the operation of the SEC's Public Reference Room, call 1-800-SEC-0330. For a complete list of the Fund's portfolio holdings, view the most recent quarterly, semiannual or annual report on Sequoia Fund's web site at http://www.sequoiafund.com/fund-reports.htm.

You may obtain a description of the Fund's proxy voting policies and procedures, and information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, without charge. Visit Sequoia Fund's web site at www.sequoiafund.com and use the ”Shareholder Information” link to obtain all proxy information. This information may also be obtained from the Securities and Exchange Commission's web site at www.sec.gov or by calling DST Systems, Inc. at (800) 686-6884.


 
 

SEQUOIA FUND, INC.
767 Fifth Avenue, Suite 4701
New York, New York 10153-4798
(800) 686-6884
Website: www.sequoiafund.com

DIRECTORS

Richard T. Cunniff
Robert D. Goldfarb
David M. Poppe
Roger Lowenstein
C. William Neuhauser
Sharon Osberg, Chairperson of the Board
Robert L. Swiggett

OFFICERS

Richard T. Cunniff

 — 

Vice Chairman

Robert D. Goldfarb

 — 

President

David M. Poppe

 — 

Executive Vice President

Joseph Quinones, Jr.

 — 

Vice President, Secretary, Treasurer &
Chief Compliance Officer

Michael Valenti

 — 

Assistant Secretary

INVESTMENT ADVISER

Ruane, Cunniff & Goldfarb Inc.
767 Fifth Avenue, Suite 4701
New York, New York 10153-4798

DISTRIBUTOR

Ruane, Cunniff & Goldfarb LLC
767 Fifth Avenue, Suite 4701
New York, New York 10153-4798

CUSTODIAN

The Bank of New York
MF Custody Administration Department
One Wall Street, 25th Floor
New York, New York 10286

REGISTRAR AND SHAREHOLDER SERVICING AGENT

DST Systems, Inc.
P.O. Box 219477
Kansas City, Missouri 64121

LEGAL COUNSEL

Seward & Kissel LLP
One Battery Park Plaza
New York, New York 10004