Fund, Inc.



JUNE 30, 2011


With Income Dividends and Capital Gains
Distributions Reinvested 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, 2011. 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 Reinvested 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  
Dec. 31, 2006     152,750       1,496,788       375,422       2,024,960  
Dec. 31, 2007     139,120       1,713,258       342,768       2,195,146  
Dec. 31, 2008     95,270       1,265,238       241,397       1,601,905  
Dec. 31, 2009     109,900       1,459,533       278,860       1,848,293  
Dec. 31, 2010     129,290       1,745,828       333,509       2,208,627  
June 30, 2011     144,310       1,948,646       372,253       2,465,209  

The total amount of capital gains distributions reinvested in shares was $1,441,638. The total amount of dividends reinvested was $130,082, including return of capital distributions reinvested of $5,294.

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 2011 are shown below with comparable results for the S&P 500 Index:

To June 30, 2011   Sequoia Fund   Standard & Poor’s 500*
3 Months     1.06 %      0.10 % 
6 Months     11.62 %      6.02 % 
1 Year     28.23 %      30.69 % 
5 Years (Annualized)     5.53 %      2.94 % 
10 Years (Annualized)     6.12 %      2.72 % 

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.

We are providing you with a copy of the transcript of the Ruane, Cunniff & Goldfarb Inc./Sequoia Fund, Inc. “Annual Investor Day 2011” meeting that was held on May 20th.


Richard T. Cunniff
Vice Chairman
  Robert D. Goldfarb
  David M. Poppe
Executive Vice President

August 19, 2011



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     0.04 % 
Total Annual Fund Operating Expenses*     1.04 % 

* 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, 2010, the Fund’s annual operating expenses net of such reimbursement were 1.00%.

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, 2011 to June 30, 2011).

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.

January 1,
June 30,
Paid During
January 1, 2011
June 30,
Actual   $ 1,000     $ 1,116.20     $ 5.25  
Hypothetical (5% return per year less 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).



As of June 30, 2011   Percent of
Net Assets
U.S. Government Obligations     19.53  
Healthcare     15.29  
Diversified Companies     9.90  
Retailing     8.71  
Aerospace/Defense     7.50  
Auto Parts     5.74  
Industrial & Construction Supplies     5.70  
Veterinary Diagnostics     4.47  
Miscellaneous Securities     3.94  
Flooring Products     3.63  
Renewable Energy     2.18  
Information Processing     2.05  
Internet Software & Services     1.87  
IT Consulting and Other Services     1.87  
Investment Banking and Brokerage     1.32  
Advertising     1.03  
Other     5.27  

The table below shows the changes of the Fund’s major positions for the period ended June 30, 2011:

Position   % of assets
  % of assets
Valeant Pharmaceuticals International     13.4 %      9.2 % 
Berkshire Hathaway     9.9 %      10.6 % 
TJX Companies Inc.     5.9 %      6.3 % 
Fastenal Company     5.7 %      6.0 % 
Idexx Laboratories     4.5 %      6.4 % 
Mohawk Industries     3.6 %      4.3 % 
       43.0 %      42.8 % 


Schedule of Investments
June 30, 2011 (Unaudited)


Shares     Value
(Note 1)
       ADVERTISING (1.03%)
933,743     Omnicom Group Inc.     $ 44,969,063  
       AEROSPACE/DEFENSE (7.50%)
947,406     Precision Castparts Corp.       155,990,398  
23,161,200     Qinetiq Group plc (United Kingdom)       44,863,244  
12,376,114     Rolls-Royce Group plc (United Kingdom)       128,092,780  
       AUTO PARTS (5.74%)
2,449,400     Advance Auto Parts, Inc.       143,265,406  
1,656,139     O’Reilly Automotive Inc. *       108,493,666  
1,520,736     Ritchie Bros. Auctioneers Incorporated       41,805,033  
179,508     Canadian Natural Resources Limited       7,514,205  
3,273     Berkshire Hathaway Inc. Class A *       380,011,665  
700,326     Berkshire Hathaway Inc. Class B *       54,198,229  
765,664     Danaher Corporation       40,572,535  
77,500     Trimble Navigation Limited *       3,072,100  
       FLOORING PRODUCTS (3.63%)
2,656,923     Mohawk Industries Inc. *       159,388,811  
256,500     Expeditors International Inc.       13,130,235  
       HEALTHCARE (15.29%)
418,000     Becton, Dickinson and Company       36,019,060  
529,800     Perrigo Company       46,553,526  
11,320,000     Valeant Pharmaceuticals International Inc.       588,187,200  


Shares     Value
(Note 1)
6,950,768     Fastenal Company     $ 250,158,140  
       INDUSTRIAL GASES (0.89%)
359,017     Praxair, Inc.       38,913,853  
298,457     MasterCard Inc.       89,937,032  
       INSURANCE BROKERS (0.66%)
1,124,830     Brown & Brown Inc.       28,863,138  
162,271     Google Inc. *       82,170,789  
435,000     The Goldman Sachs Group Incorporated       57,894,150  
477,000     International Business Machines Corp.       81,829,350  
19,247     Mettler-Toledo International Inc. *       3,246,391  
6,237,236     Hiscox Ltd. (United Kingdom)       41,926,700  
21,000     Verisk Analytics, Inc. *       727,020  
       RENEWABLE ENERGY (2.18%)
343,000     First Solar, Inc. *       45,368,610  
449,780     SMA Solar Technology AG (Germany)       50,090,199  
       RETAILING (8.71%)
39,666     Costco Wholesale Corporation       3,222,466  
1,471,375     Target Corporation       69,022,201  
4,934,190     TJX Companies, Inc.       259,193,001  
949,032     Wal-Mart Stores, Inc.       50,431,560  
2,526,848     Idexx Laboratories Inc. †*       195,982,331  
       Miscellaneous Securities (3.94%) (a)       172,515,097  
       TOTAL COMMON STOCKS (Cost $1,810,831,172)     $ 3,517,619,184  



(Note 1)
$857,000,000     U.S. Treasury Bills, 0.010% – 0.034% due 7/14/2011 through 11/3/2011     $ 856,949,791  
(Cost $856,973,780)
       TOTAL INVESTMENTS (99.73%) ††
(Cost $2,667,804,952)
       OTHER ASSETS LESS LIABILITIES (0.27%)       11,663,812  
       NET ASSETS (100.00%)     $ 4,386,232,787  

 † Refer to Note 8.
†† The cost for federal income tax purposes is identical.
  * Non-income producing.
(a) “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 June 30, 2011, 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 June 30, 2011:

Valuation Inputs     Common Stocks       U.S.
Level 1 – Quoted Prices   $ 3,517,619,184     $ 339,952,400     $ 3,857,571,584  
Level 2 – Other Significant Observable Inputs *           516,997,391       516,997,391  
Total   $ 3,517,619,184     $ 856,949,791     $ 4,374,568,975  

Represents U.S. Treasury Bills with remaining maturities of 60 days or less which are valued at their amortized cost.

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


Statement of Assets and Liabilities
June 30, 2011 (Unaudited)

Investments in securities, at value (cost $2,667,804,952) (Note 1)   $ 4,374,568,975  
Cash on deposit with custodian     5,832,991  
Receivable for capital stock sold     4,006,691  
Dividends receivable     2,389,930  
Receivable for investment securities sold     4,702,259  
Other assets     28,372  
Total assets     4,391,529,218  
Payable for capital stock repurchased     1,078,787  
Payable for investment securities purchased     451,215  
Accrued investment advisory fee     3,620,734  
Accrued other expenses     145,695  
Total liabilities     5,296,431  
Net assets applicable to 30,395,054 shares of capital stock outstanding (Note 4)   $ 4,386,232,787  
Net asset value, offering price and redemption price per share   $ 144.31  
Capital (par value and paid in surplus) $.10 par value stock,
100,000,000 shares authorized
  $ 2,652,377,331  
Undistributed net realized gains on investments (Note 5)     27,091,433  
Unrealized appreciation     1,706,764,023  
Total net assets   $ 4,386,232,787  

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


Statement of Operations
Six Months Ended June 30, 2011 (Unaudited)

Dividends, net of $981,754 foreign tax withheld   $ 15,019,886  
Interest     247,127  
Total income     15,267,013  
Investment advisory fee (Note 2)     19,985,506  
Legal and auditing fees     85,265  
Stockholder servicing agent fees     327,774  
Custodian fees     40,000  
Directors fees and expenses (Note 6)     140,960  
Other     57,495  
Total expenses     20,637,000  
Less expenses reimbursed by Investment Adviser (Note 2)     578,000  
Net expenses     20,059,000  
Net investment loss     (4,791,987 ) 
Realized gain (loss) on
Unaffiliated companies     5,728,909  
Affiliated companies (Note 8)     31,112,078  
Foreign currency transactions     (72,240 ) 
Net realized gain on investments and foreign currencies     36,768,747  
Net increase (decrease) in unrealized appreciation on
Unaffiliated companies     531,360,360  
Affiliated companies (Note 8)     (143,561,700 ) 
Net increase in unrealized appreciation on investments     387,798,660  
Net realized and unrealized gain on investments and foreign currencies     424,567,407  
Net increase in net assets from operations   $ 419,775,420  

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


Statements of Changes in Net Assets

  Six Months
Ended 6/30/11
  Year Ended
From operations
Net investment loss   $ (4,791,987 )    $ (28,404 ) 
Net realized gain on investments and foreign currencies     36,768,747       154,230,924  
Net increase in unrealized appreciation on investments     387,798,660       406,099,002  
Net increase in net assets from operations     419,775,420       560,301,522  
Distributions to shareholders from
Net realized gains           (43,650,447 ) 
Return of capital           (8,344,749 ) 
Capital share transactions (Note 4)     478,742,728       111,636,350  
Total increase     898,518,148       619,942,676  
Beginning of period     3,487,714,639       2,867,771,963  
End of period (including undistributed net investment income of $0 and $0, respectively)   $ 4,386,232,787     $ 3,487,714,639  

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


Notes to Financial Statements (Unaudited)


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 under the supervision of the Board of Directors. 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 the 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 last reported sales price 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 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.

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.

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 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 of America 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.
F. Indemnification: The Fund’s officers, directors and agents are indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss thereunder to be remote.


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 contractually obligated to reimburse the Fund for the amount, if any, by which the operating expenses of the Fund (including the investment advisory 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, 2011 and the Investment Adviser reimbursed the Fund $578,000. Such reimbursement is not subject to recoupment by the Investment Adviser.

For the six months ended June 30, 2011, there were no amounts accrued or paid to interested persons, including officers and directors, other than advisory fees of $19,985,506 to Ruane, Cunniff & Goldfarb Inc. and brokerage commissions of $193,046 to Ruane, Cunniff & Goldfarb LLC, the Fund’s distributor. Certain officers of the Fund are also officers of the Investment Adviser and the Fund’s distributor. Ruane, Cunniff & Goldfarb LLC received no compensation from the Fund on the sale of the Fund’s capital shares during the six months ended June 30, 2011.


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, 2011 were $427,128,799 and $78,553,117, respectively. Included in proceeds of sales is $13,041,776 representing the value of securities disposed of in payment of redemptions in-kind, resulting in realized gains of $9,716,555.

At June 30, 2011 the aggregate gross tax basis unrealized appreciation and depreciation of securities were $1,730,606,237 and $23,842,214, respectively.



At June 30, 2011 there were 100,000,000 shares of $.10 par value capital stock authorized. Transactions in capital stock for the six months ended June 30, 2011 and the year ended December 31, 2010 were as follows:

  2011   2010
     Shares   Amount   Shares   Amount
Shares sold     4,454,438     $ 623,666,048       3,352,182     $ 406,319,850  
Shares issued to stockholders on reinvestment of
Net realized gains on investments                 283,070       35,256,313  
Return of capital                 53,730       6,750,472  
       4,454,438       623,666,048       3,688,982       448,326,635  
Shares repurchased     1,036,256       144,923,320       2,807,613       336,690,285  
Net increase (decrease)     3,418,182     $ 478,742,728       881,369     $ 111,636,350  


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, 2011 permanent differences primarily due to a net investment loss not deductible for tax purposes, realized gains on redemptions in kind not recognized for tax purposes and different book and tax treatment of net realized losses on foreign currency transactions resulted in a net decrease in net accumulated investment loss of $4,791,987 and undistributed net realized gains on investments of $9,644,314 with a corresponding increase in paid in surplus of $4,852,327. These reclassifications had no effect on net assets.

There were no distributions paid during the six months ended June 30, 2011. The tax character of distributions paid during the year ended December 31, 2010 was as follows:

Distributions paid from
Long-term capital gains   $ 43,650,447  
Return of capital     8,344,749  
Total distributions   $ 51,995,196  

As of June 30, 2011, the components of distributable earnings on a tax basis were as follows:

Undistributed long-term gain   $ 27,091,433  
Unrealized appreciation     1,706,764,023  
     $ 1,733,855,456  

The Fund recognizes the tax benefits or expenses of uncertain tax positions only when the positions are “more likely than not” to be sustained assuming examination by tax authorities. Management has reviewed the Fund’s tax positions taken on federal income tax returns for all open years (tax years ended December 31, 2007 through December 31, 2010) and has concluded that no provision for unrecognized benefits or expenses is required in these financial statements.



Directors who are not deemed “interested persons” receive fees of $10,000 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, 2011 was $140,960.


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.


Portfolio companies 5% or more of whose outstanding voting securities are held by the Fund are defined in the Investment Company Act of 1940 as “affiliated companies.” As of December 31, 2010, the Fund held one investment which was an affiliated company as defined above. The summary of transactions for the affiliate during the six months ended June 30, 2011 is provided below:

  Purchases   Sales   Realized
Affiliate   Shares   Cost   Shares   Cost
Idexx Laboratories Inc.                 713,730     $ 20,541,120     $ 31,112,078        

As of June 30, 2011, the Fund had no investments in companies that would be deemed to be affiliated companies.


Accounting principles generally accepted in the United States of America require the Fund to recognize in the financial statements the effects of all subsequent events that provide additional evidence about conditions that existed as of the date of the Statement of Assets and Liabilities. For non-recognized subsequent events that must be disclosed to keep the financial statements from being misleading, the Fund is required to disclose the nature of the event as well as an estimate of its financial effect, or a statement that such an estimate cannot be made. Management has evaluated subsequent events through the issuance of these financial statements and has noted no such events.


In May 2011, the Financial Accounting Standards Board issued ASU No. 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements” in GAAP and the International Financial Reporting Standards (“IFRSs”). ASU No. 2011-04 amends FASB ASC Topic 820, Fair Value Measurements and Disclosures, to establish common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with GAAP and IFRSs. ASU No. 2011-04 is effective for fiscal years beginning after December 15, 2011 and for interim periods within those fiscal years. Management is currently evaluating the impact these amendments may have on the Fund’s financial statements.



  Six Months Ended June 30, 2011
  Year Ended December 31,
     2010   2009   2008   2007   2006
Per Share Operating Performance (for a share outstanding throughout the period)
Net asset value, beginning of period   $ 129.29     $ 109.90     $ 95.27     $ 139.12     $ 152.75     $ 155.45  
Income from investment operations
Net investment income (loss)     (0.17 )      0.00 (a)     0.00 (a)     0.40       0.46       (0.70 ) 
Net realized and unrealized gains (losses) on investments     15.19       21.35       14.65       (37.11 )      13.48       13.60  
Total from investment operations     15.02       21.35       14.65       (36.71 )      13.94       12.90  
Less distributions
Dividends from net investment income                 (0.02 )      (0.42 )      (0.45 )       
Distributions from net realized gains           (1.65 )      (0.00 )(a)     (6.72 )      (27.12 )      (15.60 ) 
Return of capital           (0.31 )                         
Total distributions           (1.96 )      (0.02 )      (7.14 )      (27.57 )      (15.60 ) 
Net asset value, end of period   $ 144.31     $ 129.29     $ 109.90     $ 95.27     $ 139.12     $ 152.75  
Total Return     11.62 %†      19.50 %      15.38 %      (27.03 )%      8.40 %      8.34 % 
Ratios/Supplemental data
Net assets, end of period
(in millions)
  $ 4,386.2     $ 3,487.7     $ 2,867.8     $ 2,486.2     $ 3,513.5     $ 3,599.8  
Ratio of expenses to average net assets
Before expense reimbursement     1.03 %††      1.04 %      1.05 %      1.04 %      1.03 %      1.03 % 
After expense reimbursement     1.00 %††      1.00 %      1.01 %      1.00 %      1.00 %      1.00 % 
Ratio of net investment income (loss) to average net assets     (0.24 )%††     (0.00 )%      0.01 %      0.33 %      0.29 %      (0.46 )% 
Portfolio turnover rate     4 %†      23 %      15 %      12 %      13 %      14 % 

Not annualized
†† Annualized
(a) Represents less than $0.01 per share.


Other information (Unaudited)

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.


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


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


  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


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


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


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


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


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