March 19, 2020 An Update for Our Fixed Income Investors Thomas D. Carney, CFA Director of Fixed Income Research, Portfolio Manager × x Thomas D. Carney, CFA Director of Fixed Income Research, Portfolio Manager Core Plus Income Fund/Core Plus Income (Since August 2014) Nebraska Tax-Free Income Fund (Since January 1996) Short Duration Income Fund/Short Duration Income (Since January 1996) Ultra Short Government Fund (Since January 1996) Investment industry experience since 1982 Tom joined Weitz Investments in 1995 as an equity trader. He was promoted to co-portfolio manager in 1996 and to portfolio manager in 1999. Prior to joining the firm, Tom held several positions at Chiles, Heider & Co., Inc. Previously, he was a municipal securities professional with Smith Barney. Tom has a bachelor's in finance from the University of Nebraska Omaha. Close In the midst of this unusual market environment, we thought it important to provide an update to our fixed income investors in the Weitz Short Duration and Core Plus Income funds. We have little to add to the minute-by-minute coverage of the unprecedented and uncertain market environment that appears to be increasingly driven by fear and panic. As stewards of yours and our capital, we are frustrated by the declines in both funds' NAVs since the beginning of the month. Our frustrations are deepened by the fact that we believed we had positioned both funds defensively coming into 2020, principally from a credit perspective, with corporate bond exposure broadly and high yield in particular at multi-year low levels. Our credit duration in both funds were also at multi-year low levels. Liquidity is paramount at all times — but particularly at moments such as these. At the fund level, we believe our liquidity entering this period was strong and remains so, with sizable positions in U.S. Treasury securities and other highly liquid investment-grade securities (rated AA or higher). Additionally, we continue to recheck the original investment thesis of each portfolio position with particular emphasis on any changes to their liquidity runway. While drawdowns are frustrating, they do come with a proverbial silver lining. When securities prices are being set by fear as much (or more) than reality, it can present opportunities for those able and willing to take advantage of dislocations between price and value. We will have more to report after quarter end, but we have been selectively adding to credit exposure at prices that we believe are very attractive. The net effect of any unrealized depreciation (which we generally expect to recover at or before maturity) on the investments we already own and the new investments that have been added to the portfolio we believe have meaningfully improved our forward return profile. Our job, as stewards of capital, is to keep our wits about us while those around us seem to be losing theirs. We will always lead with defense, but we have the advantageous ability to continue to recycle capital from lower to higher return investments should price/value disparities persist. We thank you for your investment in our funds and look forward to reporting on our progress in our next quarterly/annual report. As always, feel free to call your Weitz representative with any questions you may have.