November 30, 2022 12:02 PM EST

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Washington, D.C. 20549




Investment Company Act file number 811-01728

Nicholas Fund, Inc.
(Exact Name of Registrant as specified in charter)
411 East Wisconsin Avenue, Suite 2100, Milwaukee, Wisconsin 53202
(Address of Principal Executive Offices) (Zip Code)
Jennifer R. Kloehn, Senior Vice President and Treasurer
411 East Wisconsin Avenue, Suite 2100
Milwaukee, Wisconsin 53202
(Name and Address of Agent for Service)


Registrant's telephone number, including area code: 414-272-4650

Date of fiscal year end: 03/31/2023

Date of reporting period: 09/30/2022


Item 1. Report to Stockholders.


September 30, 2022





November 2022

Dear Fellow Shareholders:

     For the six-months ended September 30, 2022, Nicholas Fund (“Fund”) returned -18.87% versus -20.20% for the Standard & Poor’s 500 Index (“S&P 500”) and -23.77% return of the Russell 1000 Growth Index (“R1k Growth”). For the twelve-months ended September 30, 2022, the Fund returned -16.87% compared to -15.47% for the S&P 500 and -22.59% for the R1k Growth. During the period value stocks outperformed growth as higher interest rates depressed price-to-earnings (“PE”) ratios on higher valued growth stocks, such as Information Technology, which have a larger weighting in the R1k Growth Index.

     Returns for the Fund and selected indices are provided in the chart below for the period ended September 30, 2022.

                Average Annual Total Return  
    6 Month     1 Year   3 Year   5 Year   10 Year 50 Year
Nicholas Fund, Inc.   -18.87 %   -16.87 %   7.22 %   9.36 %   11.23 % 10.15 %
Standard & Poor’s 500 Index   -20.20 %   -15.47 %   8.16 %   9.24 %   11.70 % 10.31 %
Russell 1000 Growth Index   -23.77 %   -22.59 %   10.67 %   12.17 %   13.70 % N/A  
Consumer Price Index   3.15 %   8.22 %   4.97 %   3.79 %   2.54 % 3.98 %
Ending value of $10,000 invested                                  
in Nicholas Fund, Inc. $8,113   $8,313   $12,325   $15,644   $29,980   $1,255,699
Fund’s Expense Ratio (from 07/29/22 Prospectus): 0.71%                  


Performance data quoted represents past performance and is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month-end may be obtained by visiting

The Fund’s returns are reduced by expenses while the market indices are not. The ending values above illustrate the performance of a hypothetical $10,000 investment made in the Fund over the timeframes listed. Assumes reinvestment of dividends and capital gains. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. These figures do not imply any future performance.

     The equity markets experienced significant price declines during the six-month period ending September 30, 2022, as investors reduced risk in response to the aggressive fiscal policy enacted by the Federal Reserve (“Fed”). Following years of the Fed’s Zero Interest Rate Policy with little success in raising the rate of inflation, a shockwave of historically high inflation washed across the U.S. economy leaving policy makers uncertain over fiscal policy. The high inflation rate was initially labelled as transitory due to clogged supply chains and labor shortages that were expected to right themselves given time after the economy reopened from the COVID shutdown. The Fed shifted their policy in March 2022 to begin raising rates as their view on transitory inflation turned to sticky, embedded inflation. The Federal Reserve raised the Fed Funds rate a total of 300 basis points between March and September 2022. Longer term interest rates fell briefly in July before hitting new intra-day highs of 4.01% in late September. The impact of higher interest rates pushed mortgage rates toward 7.0% which had a chilling effect on affordability and sales.

     A mid-summer bear market rally ensued as sentiment swung to inflation peaking and the belief that the Fed’s tightening cycle would end soon; however, the Fed raised rates by 75 basis points in July and September following data suggesting inflation had eased but was still too stubbornly high. The Federal Reserve’s forward guidance was very strong and decisive stating they would stay the


course raising rates by another 75 basis points again later in the year, which led to a market sell-off into quarter-end forfeiting all the gains made between June 30 and August 16, 2022.

     Expectations for the 3Q22 corporate revenue and earnings per share (“EPS”) are to grow approximately 10.0% and 2.4%, respectively. It appears value stocks are positioned to produce higher earnings than growth stocks during the period. The cyclical energy sector is expected to have the highest EPS growth at roughly +120%. Financial and technology companies are expecting negative EPS growth.

     As of September 30, 2022, the Fund held 60 stocks and ended the quarter with 3.0% cash equivalents. The largest sector weightings included Info Technology 34.5%, Health Care 15.2%, Consumer Discretionary 14.6%, Financials 10.4% and Industrials 9.6%. The Weighted Average Market Cap was $353 billion, and the Forward P/E was 19.88%. The Fund’s PE was moderately higher than the S&P 500 due to its sector and security weights, primarily in Information Technology.

     The Fund exceeded the S&P 500 for the six-months ended September 30, 2022, largely due to the Fund’s larger sector weightings and security selection within the Consumer Discretionary and Industrial sectors. The Fund benefitted from Consumer Discretionary positions held in O’Reilly Automotive, TJX Companies and Ulta Beauty. The Industrial sector was led by positions in Cintas Corporation and Fortive Corp. The Fund’s positions in Energy and Health Care were a drag on performance. The Fund generally has an underweight in Energy stocks due to their cyclicality and dependence on hard to forecast commodity prices. Even as the price of oil fell during the period, the stocks held by the Fund in the Energy sector outperformed those held in the S&P 500. Specific positions led the underperformance during the period in the Health Care sector, including DexCom, Inc., Alcon AG and Intuitive Surgical.

     We remain cautious on the near-term prospects for the equity markets. We believe, it will be a formidable challenge to overcome significant headwinds facing the markets over the next several quarters. The Federal Reserve’s intent to raise interest rates until they sufficiently dampen demand to relieve pricing inflation will weigh heavily on stocks. We will be carefully watching the general rise of interest rates and the impact on consumer spending. Additionally, the impact Russia’s war on Ukraine will have on energy and grains could be consequential.

     Against a challenging landscape, we remain committed to investing in high quality companies with sustainable competitive advantages, consistent revenue and earnings growth and strong balance sheets. We believe companies holding these characteristics along with a stock priced at a reasonable valuation offer the best opportunity to achieve the Fund’s investment objective for our shareholders.

       Thank you for your continued support.


Mutual fund investing involves risk. Principal loss is possible. Investing in small- and medium-sized companies involves greater risks than those associated with investing in large company stocks, such as business risk, stock price fluctuations and liquidity.

Earnings growth is not representative of the Fund’s future performance.


Opinions expressed are subject to change at any time, are not guaranteed and should not be considered investment advice.

Please refer to the Schedule of Investments in the report for complete Fund holdings information. Fund holdings and sector allocations are subject to change and should not be considered a recommendation to buy or sell any security.

The S&P 500 Index is a broad-based unmanaged index of 500 stocks, which is widely recognized as representative of the equity market in general. The Russell 1000® Growth Index measures the performance of the large-cap growth segment of the U.S. equity universe. It includes those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. The Nasdaq-100 is a stock market index made up of 102 equity securities issued by 100 of the largest non-financial companies listed on the Nasdaq stock market. It is a modified capitalization-weighted index. The Consumer Price Index represents changes in prices of all goods and services purchased for consumption by urban households. One cannot invest directly in an index.

Basis Point (bp): A unit equal to 1/100th of 1% and is used to denote the change in a financial instrument.

Earnings growth: The annual rate of growth of earnings from investments.

Earnings Per Share (EPS): The net income available to common shareholders less dividends on preferred stock divided by the weighted average number of shares outstanding.

Price-to-Earnings (PE): PE is a valuation ratio of a company’s current share price compared to its per-share earnings.

Weighted Average Market Cap: A measure of the mean size of a portfolio’s holdings. It is a sum calculated by multiplying the weight of each security in a portfolio by their respective market capitalizations.

Must be preceded or accompanied by a prospectus.

The Nicholas Funds are distributed by Quasar Distributors, LLC.


Financial Highlights (NICSX)
For a share outstanding throughout each period

    Six Months                                
    09/30/2022           Years Ended March 31,        
    (unaudited)     2022     2021     2020     2019     2018  
NET ASSET VALUE,                                    
BEGINNING OF PERIOD $ 80.56   $ 80.14   $ 56.53   $ 65.11   $ 62.10   $ 65.52  
INCOME (LOSS) FROM                                    
INVESTMENT OPERATIONS                                    
Net investment income(1)   .09     .15     .33     .33     .38     .29  
Net gain (loss) on securities                                    
       (realized and unrealized)   (15.16 )   10.51     28.49     (3.33 )   7.14     5.90  
            Total from investment                                    
             operations   (15.07 )   10.66     28.82     (3.00 )   7.52     6.19  
LESS DISTRIBUTIONS                                    
From net investment income   (.04 )   (.20 )   (.34 )   (.34 )   (.39 )   (.41 )
From net capital gain   (1.21 )   (10.04 )   (4.87 )   (5.24 )   (4.12 )   (9.20 )
           Total distributions   (1.25 )   (10.24 )   (5.21 )   (5.58 )   (4.51 )   (9.61 )
NET ASSET VALUE,                                    
END OF PERIOD $ 64.24   $ 80.56   $ 80.14   $ 56.53   $ 65.11   $ 62.10  
TOTAL RETURN   (18.87 )%(2)   13.42 %   51.97 %   (5.90 )%   13.07 %   10.11 %
SUPPLEMENTAL DATA:                                    
Net assets, end of period (millions) $ 2,830.8   $ 3,582.6   $ 3,353.3   $ 2,370.2   $ 2,737.5   $ 2,695.8  
Ratio of expenses                                    
to average net assets. .71 %(3)   .71 %   .71 %   .72 %   .72 %   .72 %
Ratio of net investment income                                    
to average net assets. .25 %(3)   .18 %   .46 %   .49 %   .60 %   .46 %
Portfolio turnover rate   19.81 %(3)   11.49 %   16.74 %   15.36 %   12.76 %   18.40 %



Computed based on average shares outstanding.


Not annualized.



The accompanying notes to financial statements are an integral part of these highlights.

– 4–


Top Ten Equity Portfolio Holdings
September 30, 2022 (unaudited)

Name of Net Assets  
Microsoft Corporation 4.74 %
Apple Inc. 4.18 %
Alphabet Inc. Class C 3.82 %
O’Reilly Automotive, Inc. 2.86 %
Aon plc Class A 2.57 %
Cintas Corporation 2.49 %
Home Depot, Inc. 2.42 %
Thermo Fisher Scientific Inc. 2.41 %
Fiserv, Inc. 2.29 %
Mastercard Incorporated Class A 1.99 %
Total of top ten 29.77 %


Sector Diversification (as a percentage of portfolio)
September 30, 2022 (unaudited)

– 5–


Fund Expenses
For the six month period ended September 30, 2022 (unaudited)

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees and other operating expenses. The following table is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with those of other mutual funds.

The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period.

The first line of the table below provides information about the 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.

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 with 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 do not reflect any transactional costs, such as wire fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

    Beginning   Ending   Expenses Paid
    Account Value   Account Value   During Period*
    03/31/22   09/30/22   04/01/22 – 09/30/22
Actual $ 1,000.00 $ 811.30 $ 3.22
Hypothetical   1,000.00   1,021.44   3.60
(5% return before expenses)            



Expenses are equal to the Fund’s six-month annualized expense ratio of 0.71%, multiplied by the average account value over the period, multiplied by 183 then divided by 365 to reflect the one-half year period.

– 6–


Schedule of Investments
September 30, 2022 (unaudited)

Shares or      
Amount     Value
COMMON STOCKS — 97.08%    
  Communication Services – Media & Entertainment — 4.74%    
1,125,400 Alphabet Inc. Class C* $ 108,207,210
191,140 Meta Platforms Inc. Class A*   25,933,875
  Consumer Discretionary – Consumer Services — 3.66%    
25,610 Chipotle Mexican Grill, Inc.*   38,485,684
117,600 McDonald’s Corporation   27,135,024
450,000 Starbucks Corporation   37,917,000
  Consumer Discretionary – Retailing — 10.93%    
470,770, Inc.*   53,197,010
248,665 Home Depot, Inc.   68,616,620
114,976 O’Reilly Automotive, Inc.*   80,868,370
850,000 TJX Companies Inc   52,802,000
134,060 Ulta Beauty Inc.*   53,783,531
  Consumer Staples – Food & Staples Retailing — 1.75%    
105,000 Costco Wholesale Corporation   49,588,350
  Consumer Staples – Food, Beverage & Tobacco — 2.64%    
195,000 Constellation Brands, Inc. Class A   44,787,600
545,040 Mondelez International, Inc. Class A   29,884,543
  Energy – Energy — 1.43%    
1,700,000 Enterprise Products Partners L.P.   40,426,000
  Financials – Banks — 2.29%    
319,170 JPMorgan Chase & Co.   33,353,265
724,770 Truist Financial Corporation   31,556,486
  Financials – Diversified Financials — 4.48%    
455,000 Intercontinental Exchange, Inc.   41,109,250
164,740 S&P Global, Inc.   50,303,359
492,340 Charles Schwab Corp   35,384,476
  Financials – Insurance — 3.61%    
271,960 Aon Plc Class A   72,849,925
161,430 Chubb Limited   29,360,888


The accompanying notes to financial statements are an integral part of this schedule.

– 7–


Schedule of Investments (continued)
September 30, 2022 (unaudited)

Shares or      
Amount     Value
COMMON STOCKS — 97.08% (continued)    
  Health Care – Health Care Equipment & Services — 8.92%    
605,000 Alcon Inc. $ 35,198,900
1,110,000 Boston Scientific Corporation*   42,990,300
496,905 DexCom, Inc.*   40,020,729
183,615 Laboratory Corporation of America Holdings   37,606,188
504,380 Medtronic Plc   40,728,685
110,800 UnitedHealth Group Incorporated   55,958,432
  Health Care – Pharmaceuticals,    
   Biotechnology & Life Sciences — 6.25%    
231,900 Johnson & Johnson   37,883,184
111,620 Eli Lilly and Company   36,092,327
404,752 Merck & Co., Inc.   34,857,242
134,363 Thermo Fisher Scientific Inc.   68,147,570
  Industrials – Capital Goods — 5.68%    
1,005,000 Fastenal Company   46,270,200
650,000 Fortive Corp.   37,895,000
265,000 Honeywell International Inc.   44,247,050
178,735 Illinois Tool Works Inc.   32,288,478
  Industrials – Commercial & Professional Services — 3.96%    
181,645 Cintas Corporation   70,512,773
392,045 Copart, Inc.*   41,713,588
  Information Technology – Semiconductors &    
  Semiconductor Equipment — 6.72%    
409,031 Advanced Micro Devices, Inc.*   25,916,204
107,030 KLA Corporation   32,390,489
68,990 Lam Research Corporation   25,250,340
264,320 NVIDIA Corporation   32,085,805
340,000 Skyworks Solutions, Inc.   28,991,800
294,305 Texas Instruments Incorporated   45,552,528
  Information Technology – Software & Services — 23.60%    
140,615 Adobe Incorporated*   38,697,248
250,540 Cadence Design Systems, Inc.*   40,945,752
148,650 CrowdStrike Holdings, Inc. Class A*   24,499,007
691,620 Fiserv, Inc.*   64,714,883
267,572 Global Payments Inc.   28,911,155


The accompanying notes to financial statements are an integral part of this schedule.

– 8–


Schedule of Investments (continued)
September 30, 2022 (unaudited)

  Shares or        
  Amount     Value  
COMMON STOCKS — 97.08% (continued)      
    Information Technology –      
    Software & Services — 23.60% (continued)      
  197,860 Mastercard Incorporated Class A $ 56,259,512  
  576,180 Microsoft Corporation   134,192,322  
  260,700 Palo Alto Networks, Inc.*   42,700,053  
  80,000 Roper Technologies, Inc.   28,771,200  
  218,110 Salesforce, Inc.*   31,372,942  
  86,330 ServiceNow, Inc.*   32,599,071  
  146,985 Synopsys, Inc.*   44,905,387  
  265,030 Visa Inc. Class A   47,082,580  
  345,465 Workday, Inc. Class A*   52,586,682  
    Information Technology –      
    Technology Hardware & Equipment — 4.18%      
  855,660 Apple Inc.   118,252,212  
    Materials – Materials — 1.20%      
  166,585 Sherwin-Williams Company   34,108,279  
    Real Estate – Real Estate — 1.04%      
  435,570 CBRE Group, Inc. Class A*   29,405,331  
    (cost $1,667,972,952)   2,748,151,894  
    U.S. Government Securities — 1.76%      
$ 20,000,000 U.S. Treasury Bill 10/06/2022, 1.424%   19,996,096  
  30,000,000 U.S. Treasury Bill 10/20/2022, 2.273%   29,964,548  
    Money Market Fund — 1.25%      
  35,258,730 Morgan Stanley Liquidity Funds Government Portfolio      
    (Institutional Class), 7-day net yield 2.81%   35,258,730  
    (cost $85,216,500)   85,219,374  
    (cost $1,753,189,452) — 100.09%   2,833,371,268  
    LIABILITIES, NET OF OTHER ASSETS — (0.09)%   (2,560,121 )
    (basis of percentages disclosed above) — 100% $ 2,830,811,147  
  * Non-income producing security.      


The accompanying notes to financial statements are an integral part of this schedule.

– 9–


Statement of Assets and Liabilities
September 30, 2022 (unaudited)

Investments in securities at value (cost $1,753,189,452) $ 2,833,371,268
Receivables —    
Dividend and interest   1,497,201
Capital stock subscription   637,101
Total receivables   2,134,302
Other   64,249
Total assets   2,835,569,819
Payables —    
Investment securities purchased   1,450,332
Due to adviser —    
Management fee   1,629,333
Accounting and administrative fee   32,691
                  Total due to adviser   1,662,024
Capital stock redemption   1,477,177
Other payables and accrued expense   169,139
Total liabilities   4,758,672
Total net assets $ 2,830,811,147
Paid in capital $ 1,736,745,368
Accumulated distributable earnings   1,094,065,779
Total net assets $ 2,830,811,147
NET ASSET VALUE PER SHARE ($.50 par value,    
  200,000,000 shares authorized), offering price    
and redemption price (44,067,033 shares outstanding) $ 64.24


The accompanying notes to financial statements are an integral part of this statement.

– 10 –


Statement of Operations
For the six months ended September 30, 2022 (unaudited)

Dividend (net of foreign taxes of $18,658) $ 14,707,911  
Interest   599,296  
Total income   15,307,207  
Management fee   10,396,123  
Transfer agent fees   318,069  
Accounting and administrative fees   301,142  
Custodian fees   79,339  
Insurance   54,913  
Postage and mailing   41,341  
Printing   31,510  
Registration fees   29,900  
Directors’ fees   22,725  
Audit and tax fees   19,163  
Legal fees   8,190  
Accounting system and pricing service fees   7,228  
Other operating expenses   13,025  
Total expenses   11,322,668  
Net investment income   3,984,539  
 ON INVESTMENTS   (682,182,850 )
Net realized and unrealized gain (loss) on investments   (671,743,509 )
Net increase (decrease) in net assets resulting from operations $ (667,758,970 )


The accompanying notes to financial statements are an integral part of this statement.

– 11 –


Statements of Changes in Net Assets
For the six months ended September 30, 2022 (unaudited)
and the year ended March 31, 2022

    Six Months        
    09/30/2022     Year Ended  
    (unaudited)     03/31/2022  
Net investment income $ 3,984,539   $ 6,458,563  
Net realized gain on investments   10,439,341     249,709,212  
Change in net unrealized            
appreciation (depreciation) on investments   (682,182,850 )   191,674,157  
Net increase (decrease) in net assets            
resulting from operations   (667,758,970 )   447,841,932  
From investment operations   (54,946,355 )   (431,452,721 )
Proceeds from shares issued            
(197,287 and 553,473 shares, respectively)   14,249,346     46,234,933  
Reinvestment of distributions            
(713,617 and 4,864,190 shares, respectively)   51,173,451     400,480,106  
Cost of shares redeemed            
(1,316,596 and 2,788,654 shares, respectively)   (94,539,339 )   (233,738,021 )
Change in net assets derived            
from capital share transactions   (29,116,542 )   212,977,018  
Total increase (decrease) in net assets   (751,821,867 )   229,366,229  
NET ASSETS            
Beginning of period   3,582,633,014     3,353,266,785  
End of period $ 2,830,811,147   $ 3,582,633,014  


The accompanying notes to financial statements are an integral part of these statements.

– 12 –


Notes to Financial Statements
September 30, 2022 (unaudited)

These financial statements have been prepared pursuant to reporting rules for interim financial statements. Accordingly, these financial statements do not include all of the information and footnotes required by generally accepted accounting principles (“GAAP”) for annual financial statements. These financial statements should be read in conjunction with the financial statements and financial highlights and notes in the Fund’s Annual Report on Form N-CSR for the year ended March 31, 2022.

These financial statements have not been audited. Management believes that these financial statements include all adjustments (which, unless otherwise noted, include only normal recurring adjustments) necessary for a fair presentation of the financial results for each period shown.


Summary of Significant Accounting Policies —

Nicholas Fund, Inc. (the “Fund”)s organized as a Maryland corporation and is registered as an open-end, diversified management investment company under the Investment Company Act of 1940, as amended. The primary objective of the Fund is long-term growth. The following is a summary of the significant accounting policies of the Fund:



Equity securities traded on a stock exchange will ordinarily be valued on the basis of the last sale price on the date of valuation on the securities principal exchange, or if in the absence of any sale on that day, the closing bid price. For securities principally traded on the NASDAQ market, the Fund uses the NASDAQ Official Closing Price. Investments in shares of open-end mutual funds, including money market funds, are valued at their daily closing net asset value. Debt securities, excluding short-term investments, are valued at their current evaluated bid price as determined by an independent pricing service, which generates evaluations on the basis of dealer quotes for normal institutional-sized trading units, issuer analysis, bond market activity and various other factors. Short-term investments are valued using evaluated bid prices. Securities for which market quotations may not be readily available are valued at their fair value as determined in good faith by procedures adopted by the Board of Directors. The Board of Directors has delegated fair value responsibilities to Nicholas Company, Inc., the Fund’s adviser. The Fund did not maintain any positions in derivative instruments or engage in hedging activities during the year. Investment transactions for financial statement purposes are recorded on trade date.




In accordance with Accounting Standards Codification (“ASC”) 820-10, “Fair Value Measurement” (“ASC 820-10”), fair value is defined as the price that the Fund would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market of the investment. ASC 820-10 established a three-tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, for example, the risk inherent in a particular valuation technique used to measure fair value such as a pricing model and/or the risk inherent in the inputs to the valuation technique. Inputs may be observable or

– 13 –


Notes to Financial Statements (continued)
September 30, 2022 (unaudited)

unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.

Level 1 – quoted prices in active markets for identical investments

Level 2 – other significant observable inputs (including quoted prices for

similar investments, interest rates, benchmark yields, bids, offers,

transactions, spreads and other relationships observed in the

markets among market securities, underlying equity of the issuer,

proprietary pricing models, 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.

The following is a summary of the inputs used as of September 30, 2022 in valuing the Fund’s investments carried at value:

Valuation Inputs   in Securities
Level 1 —    
Common Stocks(1) $ 2,748,151,894
Money Market Fund   35,258,730
Level 2 —    
U.S. Government Securities   49,960,644
Level 3 —    
Total $ 2,833,371,268
(1) See Schedule of Investments for further detail by industry.    



The Fund did not hold any Level 3 investments during the period.


Net realized gain (loss) on portfolio securities was computed on the basis of specific identification.


Dividend income is recorded on the ex-dividend date, and interest income is recognized on an accrual basis. Non-cash dividends, if any, are recorded at value on date of distribution. Generally, discounts and premiums on long-term debt security purchases, if any, are amortized over the expected lives of the respective securities using the effective yield method.


Provision has not been made for federal income taxes or excise taxes since the Fund has elected to be taxed as a “regulated investment company” and intends to distribute substantially all net investment income and net realized capital gains on

– 14 –


Notes to Financial Statements (continued)
September 30, 2022 (unaudited)


sales of investments to its shareholders and otherwise comply with the provisions of Subchapter M of the Internal Revenue Code applicable to regulated investment companies.


Dividends and distributions paid to shareholders are recorded on the ex-dividend date. Distributions from net investment income are generally declared and paid at least semiannually. Distributions of net realized capital gain, if any, are declared and paid at least annually.


The amount of distributions from net investment income and net realized capital gain are determined in accordance with federal income tax regulations, which may differ from U.S. generally accepted accounting principles (“U.S. GAAP”) for financial reporting purposes. Financial reporting records are adjusted for permanent book-to-tax differences to reflect tax character.


The tax character of distributions paid during the six months ended September 30, 2022 and the year ended March 31, 2022 was as follows:

    09/30/2022   03/31/2022
Distributions paid from:        
Ordinary income $ 1,618,902 $ 21,311,770
Long-term capital gain   53,327,453   410,140,951
Total distributions paid $ 54,946,355 $ 431,452,721


The following information for the Fund is presented on an income tax basis as of March 31, 2022.

Investment cost for federal tax purposes $ 1,809,160,121  
Unrealized appreciation $ 1,808,560,460  
Unrealized depreciation   (29,205,413 )
Net unrealized appreciation $ 1,779,355,047  



The difference between financial statement and tax-basis cost is attributable primarily to holdings in partnership interests.


The Fund had no material uncertain tax positions and has not recorded a liability for unrecognized tax benefits as of September 30, 2022. Also, the Fund recognized no interest and penalties related to uncertain tax benefits during the period ended September 30, 2022. At September 30, 2022, the fiscal years 2019 through 2022 remain open to examination in the Fund’s major tax jurisdictions.


The Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies in the Financial Accounting Standards Board (“FASB”) ASC 946, “Financial Services – Investment Companies.” U.S. GAAP guidance requires management to make estimates and assumptions that effect the amounts reported in the financial statements and accompanying notes. Actual results could differ from estimates.


In the normal course of business the Fund enters into contracts that contain general indemnification clauses. The Fund’s maximum exposure under these

– 15 –


Notes to Financial Statements (continued)
September 30, 2022 (unaudited)


arrangements is unknown, as this would involve future claims against the Fund that have not yet occurred. Based on experience, the Fund expects the risk of loss to be remote.


In connection with the preparation of the Fund’s financial statements, management evaluated subsequent events after the date of the Statement of Assets and Liabilities of September 30, 2022. There have been no material subsequent events since September 30, 2022 that would require adjustment to or additional disclosure in these financial statements.


Related Parties —


Investment Adviser and Management Agreement —


The Fund has an agreement with Nicholas Company, Inc. (with whom certain officers and directors of the Fund are affiliated) (the “Adviser”) to serve as investment adviser and manager. Under the terms of the agreement, a monthly fee is paid to the Adviser based on an annualized fee of 0.75% of the average net asset value up to and including $50 million and 0.65% of the average net asset value in excess of $50 million.


The Adviser may be paid for accounting and administrative services rendered by its personnel, subject to the following guidelines: (i) up to five basis points, on an annual basis, of the average net asset value of the Fund up to and including $2 billion and up to three basis points, on an annual basis, of the average net asset value of the Fund greater than $2 billion, based on the average net asset value of the Fund as determined by valuations made at the close of each business day of each month, and (ii) where the preceding calculation results in an annual payment of less than $50,000, the Adviser, in its discretion, may charge the Fund up to $50,000 for such services.


Legal Counsel —


A director of the Adviser is affiliated with a law firm that provides services to the Fund. The Fund incurred expenses of $4,473 for the six-month period ended September 30, 2022 for legal services rendered by this law firm.


Investment Transactions —


For the period ended September 30, 2022, the cost of purchases and the proceeds from sales of investment securities, other than short-term obligations, aggregated $306,747,745 and $411,405,308, respectively.



– 16 –


Historical Record

        Investment         Dollar   Growth of
    Net   Income     Capital Gain   Weighted   an Initial
    Asset Value Distributions Distributions Price/Earnings $10,000
    Per Share   Per Share     Per Share   Ratio(2)   Investment(3)
July 14, 1969(1) $ 6.59 $   $   $ 10,000
March 31, 1985   29.24   0.6420     1.5760   13.2 times   69,858
March 31, 1986   35.26   0.5750     0.6100   15.8   87,699
March 31, 1987   39.94   0.8820     0.1870   16.3   102,387
March 31, 1988   32.15   1.8400     4.0340   14.1   98,557
March 31, 1989   35.27   1.0250     0.4510   13.2   113,155
March 31, 1990   37.72   0.9240     1.0540   14.9   127,360
March 31, 1991   42.99   0.7900     0.2250   16.9   149,180
March 31, 1992   49.68   0.6790     0.8240   19.4   178,011
March 31, 1993   52.91   0.6790     2.0420   18.5   200,098
March 31, 1994   51.10   0.8175     1.0470   16.7   200,182
March 31, 1995   52.22   0.7070     3.3170   17.2   221,970
March 31, 1996   63.81   0.5650     4.0945   21.0   293,836
March 31, 1997   67.11   0.4179     5.3166   21.7   336,973
March 31, 1998   93.98   0.3616     5.8002   30.0   508,762
March 31, 1999   85.20   0.5880     8.2716   31.7   509,446
March 31, 2000   84.56   0.3114     5.9433   37.3   543,813
March 31, 2001   54.11   0.1900     19.2500   26.6   452,780
March 31, 2002   53.74   0.2360       23.8   451,627
March 31, 2003   40.37   0.1585       16.4   340,547
March 31, 2004   56.14   0.0905       19.4   474,406
March 31, 2005   60.05   0.0678     0.4100   19.4   511,476
March 31, 2006   61.49   0.2512     5.3194   18.4   574,151
March 31, 2007   57.85   0.8173     4.3310   16.6   588,783
March 31, 2008   45.03   0.2283     9.9501   17.4   550,664
March 31, 2009   27.71   0.1714     4.6096   12.1   376,093
March 31, 2010   44.00   0.0939       19.1   598,760
March 31, 2011   48.18   0.0297     3.7458   17.9   716,234
March 31, 2012   47.85   0.1844     3.3515   18.7   769,243
March 31, 2013   55.01   0.0144     2.6127   20.1   934,800
March 31, 2014   65.28   0.3265     2.7697   21.0   1,166,414
March 31, 2015   71.57   0.2066     5.6554   21.5   1,393,972
March 31, 2016   61.78   0.3937     3.4892   16.8   1,272,980
March 31, 2017   65.52   0.4386     1.7763   22.2   1,398,599
March 31, 2018   62.10   0.4061     9.2027   23.9   1,539,955
March 31, 2019   65.11   0.3917     4.1213   23.8   1,741,281
March 31, 2020   56.53   0.3365     5.2417   22.5   1,638,615
March 31, 2021   80.14   0.3380     4.8738   33.1   2,490,274
March 31, 2022   80.56   0.1990     10.0384   27.1   2,824,387
September 30, 2022   64.24   0.0368 (a)   1.2121 (a) 22.5   2,291,442



Date of Initial Public Offering.


Based on latest 12 months accomplished earnings.


Assuming reinvestment of all distributions.


Paid on June 8, 2022 to shareholders of record on June 7, 2022.

– 17 –


Approval of Investment Advisory Contract

In May 2022, the Board of Directors of the Fund renewed the one-year term of the Investment Advisory Agreement by and between the Fund and the Adviser through May 2023. In connection with the renewal of the Investment Advisory Agreement, no changes to the amount or manner of calculation of the management fee or the terms of the agreement were proposed by the Adviser or adopted by the Board. For the fiscal year ended March 31, 2022, the management fee was 0.65% and the Fund’s total expense ratio (including the management fee) was 0.71%. In renewing the Investment Advisory Agreement, the Board carefully considered the following factors on an absolute basis and relative to the Fund’s peer group (i) the Fund’s expense ratio, which was low compared to the overall peer group; (ii) the Fund’s performance on a short-term and long-term basis; (iii) the Fund’s management fee; (iv) the range and quality of the services offered by the Adviser. The peer group fund data included large-cap blend and growth focused funds with similar asset sizes and a prospectus objective of growth. In terms of the peer group data used for performance comparisons, the Fund was ranked 6th, 16th, 21st and 19th out of 31 funds for the one-, three-, five- and ten-year periods ending March 31, 2022. The Fund had the tenth lowest expense ratio among its peer group. The Board also reviewed the Fund’s risk/return profile as measured by standard deviation and the Fund’s Morningstar rankings.

The Board considered the range of services to be provided by the Adviser to the Fund under the Advisory Agreement. The Board discussed the nature, extent, and quality of the services to be provided by the Adviser and concluded that the services provided were consistent with the terms of the advisory agreement and the needs of the Fund, and that the services provided were of a high quality. The Board considered the investment performance of the Fund and the Adviser. Among other things, the Board noted its consideration of the Fund’s performance relative to peer funds. The Board reviewed the actual relative short-term and long-term performance of the Fund. The Board agreed that the Fund demonstrated strong long-term performance relative to its benchmarks and peers. The Board also discussed the extent to which economies of scale would be realized, and whether such economies were reflected in the Fund’s fee levels and concluded that the Adviser had been instrumental in holding down Fund costs, citing consistently low fees relative to comparable funds.

The Board considered the cost of services provided by the Adviser. The Board also considered the profits realized by the Adviser in connection with the management and distribution of the Fund, as expressed by the Adviser’s management in general terms. The Board expressed the opinion that given the Board’s focus on performance and maintaining a low fee structure that the Adviser’s profits were not relevant.

The Board determined that the Adviser had fully and adequately carried out the terms and conditions of its contract with the Fund. The Board expressed satisfaction with the Fund’s performance, management’s control of expenses and the rate of the management fee for the Fund and the overall level of services provided to the Fund by the Adviser.

– 18 –


Liquidity Risk Management Program

The Fund has adopted and implemented a liquidity risk management program (the “Program”) in accordance with Rule 22e-4 under the 1940 Act. The Program seeks to assess and manage the Fund’s liquidity risk, i.e., the risk that the Fund is unable to satisfy redemption requests without significantly diluting remaining investors’ interests in the Fund. The Board of Directors of the Fund has designated Nicholas Company, Inc., the Fund’s investment adviser, to administer the Program. Certain aspects of the Program rely on third parties to perform certain functions, including the provision of market data and application of models.

The Program is comprised of various components designed to support the assessment and/or management of liquidity risk, including: (1) the periodic assessment (no less frequently than annually) of certain factors that influence the Fund’s liquidity risk; (2) the periodic classification (no less frequently than monthly) of the Fund’s investments into one of four liquidity categories that reflect an estimate of their liquidity under current market conditions; (3) a 15% limit on the acquisition of “illiquid investments” (as defined under Rule 22e-4); (4) for a Fund that does not invest primarily in “highly liquid investments” (as defined under Rule 22e-4), the determination of a minimum percentage of the Fund’s assets that will generally be invested in highly liquid investments (a “Highly Liquid Investment Minimum”); and (5) periodic reporting to the Board of Directors.

At a meeting of the Board of Directors on February 4, 2022, Nicholas Company, Inc. provided a written report to the Board addressing the operation, and the adequacy and effectiveness of the implementation, of the Program, including, as applicable, the operation of any Highly Liquid Investment Minimum and any material changes to the Program, for the period from January 1, 2021, through December 31, 2021 (the “Reporting Period”). Among other things, the annual report discussed: (1) the results of stress tests designed to assess liquidity under a hypothetical stressed scenario involving elevated redemptions; and (2) an assessment of the methodologies used to classify investments into one of four liquidity categories. The report concluded that the Program was reasonably designed to assess and manage liquidity risk and was adequately and effectively implemented during the Reporting Period.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other risks to which it may be subject.

– 19 –


Information on Proxy Voting

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available, without charge, upon request by calling 800-544-6547 or 414-276-0535. It also appears in the Fund’s Statement of Additional Information, which can be found on the SEC’s website, A record of how the Fund voted its proxies for the most recent twelve-month period ended June 30, also is available on the Fund’s website,, and the SEC’s website,

Quarterly Portfolio Schedule

The Fund files its complete schedule of investments with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Fund’s Form N-PORT reports are available on the SEC’s website at and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330.

– 20 –


Privacy Policy

     Nicholas Fund, Inc. respects each shareholder’s right to privacy. We are committed to safeguarding the information that you provide us to maintain and execute transactions on your behalf.

     We collect the following non-public personal information about you:


Information we receive from you on applications or other forms, whether we receive the form in writing or electronically. This includes, but is not limited to, your name, address, phone number, tax identification number, date of birth, beneficiary information and investment selection.


Information about your transactions with us and account history with us. This includes, but is not limited to, your account number, balances and cost basis information. This also includes transaction requests made through our transfer agent.


Other general information that we may obtain about you such as demographic information.



     We may share, only as permitted by law, non-public personal information about you with third party companies. Listed below are some examples of third parties to whom we may disclose non-public personal information. While these examples do not cover every circumstance permitted by law; we hope they help you understand how your information may be shared.

We may share non-public personal information about you:


With companies who work for us to service your accounts or to process transactions that you may request. This would include, but is not limited to, our transfer agent to process your transactions, mailing houses to send you required reports and correspondence regarding the Fund and its Adviser, the Nicholas Company, Inc., and our dividend disbursing agent to process fund dividend checks.


With a party representing you, with your consent, such as your broker or lawyer.


When required by law, such as in response to a subpoena or other legal process.

     The Fund and its Adviser maintain policies and procedures to safeguard your non-public personal information. Access is restricted to employees who the Adviser determines need the information in order to perform their job duties. To guard your non-public personal information we maintain physical, electronic, and procedural safeguards that comply with federal standards.

     In the event that you hold shares of the Fund with a financial intermediary, including, but not limited to, a broker-dealer, bank, or trust company, the privacy policy of your financial intermediary would govern how your non-public personal information would be shared with non-affiliated third parties.

– 21 –


Automatic Investment Plan — An Update

The Nicholas Family of Funds’ Automatic Investment Plan provides a simple method to dollar cost average into the fund(s) of your choice.

Dollar cost averaging involves making equal systematic investments over an extended time period. A fixed dollar investment will purchase more shares when the market is low and fewer shares when the market is high. The automatic investment plan is an excellent way for you to become a disciplined investor.

The following table illustrates what dollar cost averaging can achieve. Please note that past performance is no guarantee of future results. Nicholas Company recommends dollar cost averaging as a practical investment method. It should be consistently applied for long periods so that investments are made through several markets cycles.

    Nicholas Fund
$1,000 initial investment on   07/14/1969 *   09/30/2012
Number of years investing $100 each month          
following the date of initial investment   52.7     10
Total cash invested $ 64,900   $ 13,000
Total dividend and capital gain distributions reinvested . $ 3,183,336   $ 8,998
Total full shares owned at 09/30/2022   54,743     330
Total market value at 09/30/2022 $ 3,516,732   $ 21,242


The results above assume purchase on the last day of the month. The Nicholas Automatic Investment Plan actually invests on the date specified by the investor. Total market value includes reinvestment of all distributions.

*Date of Initial Public Offering.

– 22 –


Nicholas Funds Services Offered

  • Traditional • SIMPLE
  • Roth • SEP
Coverdell Education Accounts
Automatic Investment Plan
Direct Deposit of Dividend and Capital Gain Distributions
Systematic Withdrawal Plan
Monthly Automatic Exchange between Funds
Telephone Purchase and Redemption
Telephone Exchange  
24-hour Automated Account Information (800-544-6547)
24-hour Internet Account Access (


Please call a shareholder representative for further information on the above services or with any other questions you may have regarding the Nicholas Funds (800-544-6547).

– 23 –


Directors and Officers
DAVID O. NICHOLAS, President and Director

JOHN A. HAUSER, Director



JENNIFER R. KLOEHN, Senior Vice President,
Treasurer and Chief Compliance Officer

LAWRENCE J. PAVELEC, Senior Vice President and Secretary

MICHAEL L. SHELTON, Senior Vice President

JEFFREY J. STRONG, Senior Vice President

CANDACE L. LESAK, Vice President

Investment Adviser
Milwaukee, Wisconsin
414-276-0535 or 800-544-6547

Dividend Disbursing Agent
Transfer Agent
Milwaukee, Wisconsin
414-276-0535 or 800-544-6547

Milwaukee, Wisconsin

Milwaukee, Wisconsin

Independent Registered Public Accounting Firm
Milwaukee, Wisconsin

Milwaukee, Wisconsin

This report is submitted for the information of shareholders of the Fund. It is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus.


Item 2. Code of Ethics.

Applicable only to annual reports.

Item 3. Audit Committee Financial Expert.

Applicable only to annual reports.

Item 4. Principal Accountant Fees and Services.

Applicable only to annual reports.

Item 5. Audit Committee of Listed Registrants.

Not applicable to this filing.

Item 6. Schedule of Investments.

The schedule of investments in securities of unaffiliated issuers is included as part of the report to shareholders filed under Item 1 of this Form N-CSR.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Applicable only to annual reports filed by closed-end funds.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

Applicable only to annual reports filed by closed-end funds.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers.

Applicable only to closed-end funds.

Item 10. Submission of Matters to a Vote of Security Holders.

Not applicable to this filing.

Item 11. Controls and Procedures.

(a) The Fund’s principal executive officer and principal financial officer, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) are effective, based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended.

(b) There were no changes in the registrant’s internal controls over financial reporting (as defined in

Rule 30a-3(d) under the 1940 Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.


Applicable only to closed-end funds.

Item 13. Exhibits.

(a)(1) Sarbanes-Oxley Code of Ethics for Principal Executive and Senior Financial Officers (that is the subject of the disclosure required by Item 2).

Applicable only to annual reports.

(a)(2) Certifications of Principal Executive Officer and Principal Financial Officer pursuant to Rule 30a-2(a) under the Investment Company Act of 1940, attached hereto as EX-99.CERT.

(a)(3) Any written solicitation to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the registrant to 10 or more person. Applicable only to closed-end funds.

(a)(4) Change in the registrant’s independent public accountant.

Not applicable to this filing.

(b) Certifications of Principal Executive Officer and Principal Financial Officer pursuant to Rule 30a-2(b) under the Investment Company Act of 1940, attached hereto as EX-99.906 CERT.



     Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant) Nicholas Fund, Inc.

By: /s/ David O. Nicholas
Name: David O. Nicholas
Title: Principal Executive Officer

Date: November 30, 2022

     Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By: /s/ David O. Nicholas
Name: David O. Nicholas
Title: Principal Executive Officer
Date: November 30, 2022

By: /s/ Jennifer R. Kloehn
Name: Jennifer R. Kloehn
Title: Principal Financial Officer
Date: November 30, 2022





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