Sequoia Fund Semi Annual Report

SEQUOIA FUND, INC.
ILLUSTRATION OF AN ASSUMED INVESTMENT OF $10,000
With Income Dividends Reinvested and Capital Gains
Distributions Accepted in Shares

The table below covers the period from July 15, 1970 (the date Fund shares were first offered to the public) to June 30, 2006. This period was one of widely fluctuating common stock prices. The results shown should not be considered as a representation of the dividend income or capital gain or loss which may be realized from an investment made in the Fund today.

PERIOD ENDED: Value of
Initial
$10,000
Investment
Value of
Cumulative
Capital Gains
Distributions
Value of
Cumulative
Reinvested
Dividends
Total
Value of
Shares





July 15, 1970 $10,000 $— $— $10,000
May 31, 1971 11,750 184 11,934
May 31, 1972 12,350 706 451 13,507
May 31, 1973 9,540 1,118 584 11,242
May 31, 1974 7,530 1,696 787 10,013
May 31, 1975 9,490 2,137 1,698 13,325
May 31, 1976 12,030 2,709 2,654 17,393
May 31, 1977 15,400 3,468 3,958 22,826
Dec. 31, 1977 18,420 4,617 5,020 28,057
Dec. 31, 1978 22,270 5,872 6,629 34,771
Dec. 31, 1979 24,300 6,481 8,180 38,961
Dec. 31, 1980 25,040 8,848 10,006 43,894
Dec. 31, 1981 27,170 13,140 13,019 53,329
Dec. 31, 1982 31,960 18,450 19,510 69,920
Dec. 31, 1983 37,110 24,919 26,986 89,015
Dec. 31, 1984 39,260 33,627 32,594 105,481
Dec. 31, 1985 44,010 49,611 41,354 134,975
Dec. 31, 1986 39,290 71,954 41,783 153,027
Dec. 31, 1987 38,430 76,911 49,020 164,361
Dec. 31, 1988 38,810 87,760 55,946 182,516
Dec. 31, 1989 46,860 112,979 73,614 233,453
Dec. 31, 1990 41,940 110,013 72,633 224,586
Dec. 31, 1991 53,310 160,835 100,281 314,426
Dec. 31, 1992 56,660 174,775 112,428 343,863
Dec. 31, 1993 54,840 213,397 112,682 380,919
Dec. 31, 1994 55,590 220,943 117,100 393,633
Dec. 31, 1995 78,130 311,266 167,129 556,525
Dec. 31, 1996 88,440 397,099 191,967 677,506
Dec. 31, 1997 125,630 570,917 273,653 970,200
Dec. 31, 1998 160,700 798,314 353,183 1,312,197
Dec. 31, 1999 127,270 680,866 286,989 1,095,125
Dec. 31, 2000 122,090 903,255 289,505 1,314,850
Dec. 31, 2001 130,240 1,002,955 319,980 1,453,175
Dec. 31, 2002 126,630 976,920 311,226 1,414,776
Dec. 31, 2003 147,610 1,146,523 362,790 1,656,923
Dec. 31, 2004 154,270 1,200,687 379,159 1,734,116
Dec. 31, 2005 155,450 1,331,529 382,059 1,869,038
June 30, 2006 156,610 1,342,080 384,909 1,883,599

The total amount of capital gains distributions accepted in shares was $744,707, the total amount of dividends reinvested was $116,740.

No adjustment has been made for any taxes payable by shareholders on capital gain distributions and dividends reinvested in shares.

To the Shareholders of Sequoia Fund, Inc.

Dear Shareholder:

Sequoia Fund's results for the second quarter of 2006 are shown below with comparable results for the leading market indexes:

To June 30, 2006 Sequoia
Fund
Dow Jones
Industrials
Standard &
Poor's 500



3 Months -1.82% 0.94% -1.44%
6 Months 0.78% 5.22% 2.71%
1 Year 9.23% 11.09% 8.63%
5 Years (Annualized) 6.72% 3.44% 2.49%
10 Years (Annualized) 12.37% 9.11% 8.31%

The performance shown above represents past performance and does not guarantee future results. Current performance may be lower or higher than the performance information shown.

The S&P 500 Index is an unmanaged, capitalization-weighted index of the common stocks of 500 major US corporations. The Dow Jones Industrial Average is an unmanaged, price-weighted index of 30 actively traded blue chip stocks. The performance data quoted represents past performance and assumes reinvestment of dividends. The investment return and principal value of an investment in the Fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Year to date performance as of the most recent month end can be obtained by calling DST Systems, Inc. at (800) 686-6884.


Enclosed is a copy of the transcript of our 2006 Annual Investor Day which was held on May 19th.

Currently, capital gains realized year to date are approximately $8.00 per share. The actual capital gains distribution in December will vary from this figure depending on investment activity. We will update this information in subsequent quarterly reports.

Sincerely,

Richard T. Cunniff
Robert D. Goldfarb
David M. Poppe

August 16, 2006

Shareholder Expense Example

As a shareholder of the Fund, you incur ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2006 to June 30, 2006).

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and will not help you determine the relative total costs of owning different funds.

   
Beginning
Account
Value
January 1, 2006
Ending
Account
Value
June 30,
2006
Expenses
Paid During
Period*
January 1, 2006
to June 30,
2006
   
 
 
Actual  
$1,000
 
$1,007.80
 
$4.98
Hypothetical
(5% return per year before expenses)
 
$1,000
 
$1,019.84
 
$5.01

* Expenses are equal to the Fund's annualized expense ratio of 1.00%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

The table below shows the changes of the Fund's major positions for the period ended June 30, 2006:

Position  
% of assets
6/30/2006
% of assets
12/31/2005

   
 
Berkshire Hathaway  
 
32.8%
 
33.8%
Progressive Corp.  
 
15.7%
 
17.4%
TJX Companies Inc.  
 
7.5%
 
7.4%
Mohawk Industries  
 
6.6%
 
8.0%
Expeditors International      
4.8%
 
3.4%
Fastenal Company  
 
4.7%
 
4.4%
     
 
     Top six positions  
 
72.1%
 
74.4%
     
 

SEQUOIA FUND, INC.
Schedule of Investments
June 30, 2006 (Unaudited)

COMMON STOCKS (93.79%)
Shares       Value
(Note 1)

     
    AUTO AND HOME SUPPLY STORES (1.52%)    
1,699,801   O'Reilly Automotive Inc.*   $53,016,793
       
    CASUALTY INSURANCE (15.70%)    
21,238,148   Progressive Corporation   546,032,785
       
    CHEMICAL DIAGNOSTIC SUBSTANCES (3.30%)    
1,528,838   IDEXX Laboratories Inc.*   114,861,599
       
    DIVERSIFIED COMPANIES (32.81%)    
12,436   Berkshire Hathaway Inc. Class A*   1,139,871,324
239   Berkshire Hathaway Inc. Class B*   727,277
       
        1,140,598,601
       
    ELECTRONIC COMPUTER MANUFACTURING (2.35%)    
2,149,440   International Game Technology   81,549,754
       
    FINANCE (0.52%)    
376,400   MasterCard Inc.*   18,067,200
       
    FREIGHT TRANSPORTATION (4.83%)    
2,997,808   Expeditors International of Washington, Inc.   167,907,226
       
    INDUSTRIAL & CONSTRUCTION SUPPLIES (4.70%)    
4,053,871   Fastenal Company   163,330,463
       
    INSURANCE AGENTS & BROKERS (2.43%)    
2,888,617   Brown & Brown Inc.    84,405,389
       
    MEDICIAL & HOSPITAL EQUIPMENT (0.12%)    
120,083   Patterson Companies Inc.*   4,194,499
       
    PROCESS CONTROL INSTRUMENTS (0.71%)    
384,112   Danaher Corporation   24,706,084
       
    RETAILING (18.18%)    
1,510,600   Bed Bath & Beyond Inc.*   50,106,602
39,799   Costco Wholesale Corporation   2,273,717
1,471,866   Target Corporation   71,930,091
1,145,642   Tiffany & Company   37,829,099
11,411,433   TJX Companies, Inc.   260,865,358
2,359,150   Wal-Mart Stores Inc.   113,640,255
2,119,845   Walgreen Company   95,053,850
       
        631,698,972
       
    TEXTILE – CARPETS (6.62%)    
3,274,126   Mohawk Industries, Inc. *   $230,334,764
       
    TOTAL COMMON STOCKS ($1,131,955,424)   $3,260,704,129
       
    PREFERRED STOCKS (2.64%)    
         
    AUTOMOTIVE MANUFACTURING (2.64%)    
95,034
  Porsche AG – Preferred (Germany)  
91,855,493
       
    TOTAL PREFERRED STOCKS ($67,935,480)  
91,855,493
       
Principal
Amount
       

       
    U.S. GOVERNMENT OBLIGATIONS (3.57%)    
$125,000,000   U.S. Treasury Bills due 08/03/06 through 08/24/06   124,263,813
       
    TOTAL U.S. GOVERNMENT OBLIGATIONS
(Cost $124,263,813)
  124,263,813
       
    TOTAL INVESTMENTS (100%)††
(Cost $1,324,154,717)
  $3,476,823,435
       

†† The cost for federal income tax purposes is identical.
* Non-income producing.

The accompanying notes form an integral part of these Financial Statements

 SEQUOIA FUND, INC.
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)

ASSETS:  
     Investments in securities, at value (cost $1,324,154,717) (Note 1) $3,476,823,435
     Cash on deposit with custodian 5,321,324
     Receivable for capital stock sold 791,527
     Receivable for investment securities sold 13,526,164
     Dividends receivable  390,926
     Other assets 28,344
 
          Total assets 3,496,881,720
 
LIABILITIES:  
     Payable for capital stock repurchased 146,070
     Payable for investment securities purchased 15,396,124
     Accrued investment advisory fee 2,952,165
     Accrued other expenses 220,946
 
          Total liabilities 18,715,305
 
Net assets applicable to 22,208,885 shares of capital stock outstanding (Note 4) $3,478,166,415
 
Net asset value, offering price and redemption price per share $156.61
 

The accompanying notes form an integral part of these Financial Statements.

 SEQUOIA FUND, INC.
 Statement of Operations
Six Months Ended June 30, 2006 (Unaudited)

INVESTMENT INCOME:    
     Income:    
          Dividends (net of $121,180 foreign tax withheld)  
$5,716,385
          Interest   4,202,666
          Other Income   24,980
   
                    Total income   9,944,031
   
     Expenses:    
          Investment advisory fee (Note 2)   17,695,670
          Legal and auditing fees   127,086
          Stockholder servicing agent fees   247,589
          Custodian fees   40,000
          Directors fees and expenses (Note 6)   138,691
          Other   155,431
   
                    Total expenses   18,404,467
     Less expenses reimbursed by Investment Adviser (Note 2)   634,000
   
                    Net expenses   17,770,467
   
                    Net investment (loss)   (7,826,436)
   
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS:    
     Realized gain/(loss) on:    
          Investments   139,829,745
          Foreign currency transactions  
(5,174)
   
                    Net realized gain on investments and foreign currencies   139,824,571
     Net (decrease) in unrealized appreciation on:    
          Investments   (103,319,285)
   
                    Net realized and unrealized gain on investments and foreign currencies   36,505,286
   
Increase in net assets from operations   $28,678,850
   

The accompanying notes form an integral part of these Financial Statements.

SEQUOIA FUND, INC.
Statements of Changes in Net Assets

    Six Months
Ended 6/30/06
(Unaudited)
  Year Ended
12/31/05
   
 
INCREASE/(DECREASE) IN NET ASSETS:        
     From operations:        
          Net investment (loss)   $(7,826,436)   $(17,228,982)
          Net realized gain on investments and foreign Currencies   139,824,571   378,898,763
          Net (decrease) in unrealized appreciation   (103,319,285)   (89,974,201)
   
 
               Net increase in net assets from operations   28,678,850   271,695,580
     Distributions to shareholders from:        
          Net investment income   0   0
          Net realized gains   (1,110,755)   (245,091,727)
          Capital share transactions (Note 4)   (122,713,019)   (225,675,415)
   
 
               Total (decrease)   (95,144,924)   (199,071,562)
NET ASSETS:        
     Beginning of period   3,573,311,339   3,772,382,901
   
 
     End of period   $3,478,166,415   $3,573,311,339
   
 
NET ASSETS CONSIST OF:        
     Capital (par value and paid in surplus)   $1,242,306,269   $1,316,344,778
     Undistributed net realized gains (Note 5)   83,191,428   978,558
     Unrealized appreciation   2,152,668,718   2,255,988,003
   
 
               Total Net Assets   $3,478,166,415   $3,573,311,339
   
 

The accompanying notes form an integral part of these Financial Statements.

SEQUOIA FUND, INC.
Notes to Financial Statements

NOTE 1—SIGNIFICANT ACCOUNTING POLICIES:

Sequoia Fund, Inc. (the "Fund") is registered under the Investment Company Act of 1940, as amended, as a non-diversified, open-end management investment company. The investment objective of the Fund is growth of capital from investments primarily in common stocks and securities convertible into or exchangeable for common stock. The following is a summary of significant accounting policies, consistently followed by the Fund in the preparation of its financial statements.

A.

Valuation of investments: Investments are carried at market value or at fair value as determined by the Board of Directors. Securities traded on a national securities exchange or on a foreign exchange are valued at the last reported sales price on the principal exchange on which the security is listed on the last business day of the period; securities traded in the over-the-counter market are valued in accordance with NASDAQ Official Closing Price on the last business day of the period; listed securities and securities traded in the over-the-counter market for which no sale was reported on that date are valued at the mean between the last reported bid and asked prices; U.S. Treasury Bills with remaining maturities of 60 days or less are valued at their amortized cost. U.S. Treasury Bills that when purchased have a remaining maturity in excess of sixty days are stated at their discounted value based upon the mean between the bid and asked discount rates until the sixtieth day prior to maturity, at which point they are valued at amortized cost.

 

Foreign currencies: Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at the date of valuation. Purchases and sales of foreign portfolio securities are translated into U.S. dollars at the rates of exchange prevailing when such securities are acquired or sold. Income and expenses are translated into U.S. dollars at the rates of exchange prevailing when accrued. The fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments. Reported net realized foreign exchange gains or losses arise from the sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.

B.

Accounting for investments: Investment transactions are accounted for on the trade date and dividend income is recorded on the ex-dividend date. Interest income is accrued as earned. Premiums and discounts on fixed income securities are amortized over the life of the respective security. The net realized gain or loss on security transactions is determined for accounting and tax purposes on the specific identification basis.

C.

Federal income taxes: It is the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to its stockholders. Therefore, no federal income tax provision is required.

D.

Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.

E.

General: Dividends and distributions are recorded by the Fund on the ex-dividend date.

NOTE 2—INVESTMENT ADVISORY CONTRACTS AND PAYMENTS TO INTERESTED PERSONS:

The Fund retains Ruane, Cunniff & Goldfarb Inc., as its investment adviser. Ruane, Cunniff & Goldfarb Inc. (the "Investment Adviser") provides the Fund with investment advice, administrative services and facilities.

Under the terms of the Advisory Agreement, the Investment Adviser receives a management fee equal to 1% per annum of the Fund's average daily net asset values. This percentage will not increase or decrease in relation to increases or decreases in the net asset value of the Fund. Under the Advisory Agreement, the Investment Adviser is obligated to reimburse the Fund for the amount, if any, by which the operating expenses of the Fund (including the management fee) in any year exceed the sum of 1 1/2% of the average daily net asset values of the Fund during such year up to a maximum of $30,000,000, plus 1% of the average daily net asset values in excess of $30,000,000. The expenses incurred by the Fund exceeded the percentage limitation during the six months ended June 30, 2006 and the Investment Adviser reimbursed the Fund $634,000.

For the six months ended June 30, 2006, there were no amounts accrued or paid to interested persons, including officers and directors, other than advisory fees of $17,695,670 to Ruane, Cunniff & Goldfarb Inc. and brokerage commissions of $194,044 to Ruane, Cunniff & Goldfarb LLC, an affiliate of the Investment Adviser. Certain officers of the Fund are also officers of the Investment Adviser and the Fund's distributor. Ruane, Cunniff & Goldfarb LLC, the Fund's distributor, received no compensation from the Fund on the sale of the Fund's capital shares during the six months ended June 30, 2006.

In October 2005, the Advisory Agreement was terminated as a result of its assignment due to the death of a control person of the Investment Adviser, under the provisions of the Advisory Agreement and as required by the 1940 Act. The Fund's Board of Directors approved an interim advisory contract between the Fund and the Investment Adviser with substantially identical terms of the Advisory Agreement. On December 12, 2005, the Board of Directors approved a new investment advisory contract between the Fund and the Investment Adviser effective March 1, 2006, subject to stockholder approval, with substantially identical terms of the Advisory Agreement. The new investment advisory contract was approved by stockholders at the February 24, 2006 stockholder meeting.

NOTE 3—PORTFOLIO TRANSACTIONS:

The aggregate cost of purchases and the proceeds from the sales of securities, excluding U.S. government obligations, for the six months ended June 30, 2006 were $148,546,200 and $233,663,272, respectively. Included in proceeds of sales is $62,854,735 representing the value of securities disposed of in payment of redemptions in-kind, resulting in realized gains of $54,264,838.

At June 30, 2006 the aggregate gross unrealized appreciation and depreciation of securities were $2,155,782,675 and $3,113,957, respectively.

NOTE 4—CAPITAL STOCK:

At June 30, 2006 there were 100,000,000 shares of $.10 par value capital stock authorized. Transactions in capital stock for the six months ended June 30, 2006 and the year ended December 31, 2005 were as follows:

  2006 2005


  Shares Amount Shares Amount




Shares sold 298,932   $46,838,429 676,222 $103,672,116
Shares issued to stockholders on reinvestment of:          
     Net investment income  
     Net realized gains on Investments 5,628   877,923 1,281,840 198,753,650

 


  304,560   47,716,352 1,958,062 302,425,766
Shares repurchased 1,082,015   170,429,371 3,424,141 528,101,181

 


Net (decrease) (777,455)   $(122,713,019) (1,466,079) $(225,675,415)




NOTE 5—DISTRIBUTIONS TO SHAREHOLDERS:

Distributions to shareholders are determined in accordance with federal tax regulations and may differ from those determined for financial statement purposes. To the extent these differences are permanent such amounts are reclassified within the capital accounts based on federal tax regulations. During the six months ended June 30, 2006 permanent differences due to a net investment loss not deductible for tax purposes and realized gains on redemptions in kind not recognized for tax purposes resulted in a net decrease in net accumulated investment loss of $7,826,436 and undistributed net realized gains of $56,500,946 with a corresponding increase in paid in surplus of $48,674,510. These reclassifications had no effect on net assets.

The tax character of distributions paid during the six months ended June 30, 2006 and the year ended December 31, 2005 was as follows:

  2006 2005


Distributions paid from:    
Ordinary income $— $—
Long-term capital gains 1,110,755 245,091,727


          Total distributions $1,110,755 $245,091,727


   
As of June 30, 2006, the components of distributable earnings on a tax basis were as follows:
   
Undistributed long-term gain  
$83,191,428
Unrealized appreciation  
2,152,668,718
 

 
$2,235,860,146
 

NOTE 6—DIRECTORS FEES AND EXPENSES:

Directors who are not deemed "interested persons" receive fees of $6,000 per quarter and $2,500 for each meeting attended, and are reimbursed for travel and other out-of-pocket disbursements incurred in connection with attending directors meetings. The total of such fees and expenses paid by the Fund to these directors for the six months ended June 30, 2006 was $138,691.

NOTE 7—The interim financial statements have not been examined by the Fund's independent registered public accounting firm and accordingly they do not express an opinion thereon.

NOTE 8—FINANCIAL HIGHLIGHTS:

Six Months
Ended
June 30,
Year Ended December 31,
2006 2005 2004 2003 2002 2001






Per Share Operating Performance (for a share outstanding throughout the period)          
Net asset value, beginning of Period $155.45 $154.27 $147.61 $126.63 $130.24 $122.09






Income from investment operations:        
Net investment income (loss)  (0.35) (0.75) (0.58) (0.62) (0.41) 0.97
Net realized and unrealized gains (losses) on investments 1.56 12.57 7.45 22.21 (3.03) 11.52






          Total from investment operations  1.21 11.82 6.87 21.59 (3.44) 12.49






Less distributions:        
Dividends from net investment income (0.00) (0.00) (0.00) (0.00) (0.01) (0.97)
Distributions from net realized gains (0.05) (10.64) (0.21) (0.61) (0.16) (3.37)






          Total distributions (0.05) (10.64) (0.21) (0.61) (0.17) (4.34)






Net asset value, end of period $156.61 $155.45 $154.27 $147.61 $126.63 $130.24






Total Return 0.78%† 7.78% 4.66% 17.12% -2.64% 10.52%
Ratios/Supplemental data        
Net assets, end of period (in millions) $3,478.2 $3,573.3 $3,772.4 $3,973.6 $3,905.1 $4,230.1
Ratio to average net assets:        
     Expenses 1.0%* 1.0% 1.0% 1.0% 1.0% 1.0%
     Net investment income -0.4%* -0.5% -0.4% -0.5% -0.3% 0.8%
Portfolio turnover rate  9%* 8% 6% 3% 8% 7%


  Not annualized
*
  Annualized

Results of Stockholder Meeting

A Special Meeting of the Stockholders of Sequoia Fund, Inc. was held on February 24, 2006. At the meeting, the stockholders were asked to consider the approval of a new Investment Advisory Contract between the Fund and Ruane, Cunniff & Goldfarb Inc. A majority of the outstanding voting shares of the Fund, as defined in the Investment Company Act of 1940, voted in favor of approving the new Investment Advisory Contract as follows: 13,540,662 shares voted in favor, 91,891 voted against with 83,056 shares abstaining.

Other information

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

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

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

DIRECTORS

Richard T. Cunniff
Robert D. Goldfarb
David M. Poppe
Vinod Ahooja
Roger Lowenstein
Francis P. Matthews
C. William Neuhauser
Sharon Osberg
Robert L. Swiggett

OFFICERS

Richard T. Cunniff Vice Chairman
Robert D. Goldfarb President
David M. Poppe Executive Vice President
Joseph Quinones, Jr. Vice President, Secretary, Treasurer & Chief Compliance Officer

INVESTMENT ADVISER

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

DISTRIBUTOR

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

CUSTODIAN

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

REGISTRAR AND SHAREHOLDER SERVICING AGENT

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

LEGAL COUNSEL

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

This report has been prepared for the information of shareholders of Sequoia Fund, Inc.