PORTFOLIO MANAGER'S DISCUSSION & ANALYSIS – BALANCED FUND

JUNE 30, 2010

Portfolio Manager:  Bradley P. Hinton

The Balanced Fund declined -4.2% in the second calendar quarter, compared to a -5.7% decline for the Blended Index. For the calendar year-to-date, the Fund returned +2.5% compared to a -2.2% decline for the Blended Index. Coinstar was a standout again this quarter as its Redbox division continued to expand profitably and take market share from brick and mortar DVD retailers. Both the stock (+32%) and the convertible bonds (sold at a healthy gain) delivered exceptional returns. Technology companies Microsoft (-21%) and Dell (-20%) detracted from the Fund’s returns despite posting decent operating results. Monsanto Company fell -35% on a disappointing earnings release and outlook, while Apollo Group declined -31% on mounting regulatory concerns in the for-profit education industry. After a strong run, Liberty Media – Interactive pulled back sharply (-31%) on fears of a renewed slowdown in consumer spending. All of these companies continue to generate significant free cash flow and maintain strong competitive positions. Their stocks now trade at among the largest discounts to our business value estimates.

We were net buyers of stocks during the quarter. In particular, we continue to find value in large, higher quality companies. New positions Aon Corporation, Praxair, Lockheed Martin, Target and Omnicom Group operate in vastly different industries but all fit this bill. We also added to the Fund’s holdings in Accenture plc, Wal-Mart Stores, ConocoPhillips and Monsanto. FLIR Systems was our other new purchase this quarter. FLIR is a global leader in infrared cameras, night vision and thermal imaging systems sold into both government and commercial markets. The company’s proprietary technology, low cost production and wide distribution have contributed to very strong operating margins. FLIR has a long runway of potential growth, and the management team has a solid track record of allocating capital wisely. The stock trades at $29, and we think business value is in the upper $30’s per share.

In aggregate the Fund’s bonds generated modest positive returns with few surprises during the quarter. Our outlook for fixed income securities from today’s price levels is subdued. We did not purchase any new corporate bonds or mortgage-backed securities (MBS) in the second quarter. As a result our corporate exposure is little changed at 12% of net assets, while MBS account for another 8% of net assets. We have avoided Treasuries in recent quarters and continue to do so. This decision has held back our returns modestly in the short-run as investors have been drawn to the perceived safety and soundness of U.S. government obligations.

As a result of the activity described above, the Fund’s equity exposure increased to 59% of net assets. Various corporate and MBS bonds represent another 20%, while cash reserves account for the remaining 21% of net assets. This allocation falls out of our bottom-up search for value. While the Fund has room for more equities and bonds, we are likely to focus on the common stocks of high quality companies under current market conditions.

These performance numbers reflect the deduction of the Fund’s annual operating expenses which as stated in its most recent Prospectus are 1.19% of the Fund’s net assets. The returns assume redemption at the end of each period and reinvestment of dividends. This information represents past performance and past performance does not guarantee future results. The investment return and the 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 the original cost. Current performance may be lower or higher than the performance data quoted above. Performance data current to the most recent month-end may be obtained at www.weitzfunds.com/performance/monthly.asp.

* Fund inception date: October 1, 2003. All performance numbers assume reinvestment of dividends.

# Index performance is hypothetical and is for illustrative purposes only.

^(a) A blend of 60% S&P 500 and 40% Barclays Capital Intermediate U.S. Government/Credit Index.

^(b) The S&P 500 is an unmanaged index consisting of 500 companies generally representative of the market for the stocks of large-size U.S. companies.

^(c) Barclays Capital Intermediate U.S. Government/Credit Index is a total return performance benchmark consisting of government securities and publicly issued corporation debt with maturities from one to ten years and rated at least BBB by Standard & Poor’s or Baa by Moody’s Investor Service.

Investors should consider carefully the investment objectives, risks, and charges and expenses of the Fund before investing. The Fund’s Prospectus contains this and other information about the Fund and should be read carefully before investing. Portfolio composition is subject to change at any time and references to specific securities, industries, and sectors referenced in this letter are not recommendations to purchase or sell any particular security. Current and future portfolio holdings are subject to risk. See the Schedule of Investments in Securities included in the Fund’s quarterly report for the percent of assets of the Fund invested in particular industries or sectors.