Letter from the Chairman and President

Dear Fellow Shareholders:
We are pleased to present the Semi-Annual Report for The Oakmark Family of Funds. After a difficult start, the last month of the quarter provided reinforcing evidence that value investing is nearing a positive turn.

two.jpg (7043 bytes)One of the most important hallmarks of a successful investment firm is the ability to create a team of focused and disciplined individuals that can define and execute its investment philosophy in environments that can, at times, be extremely challenging.

On the next several pages, you will notice some changes in our "lineup." As you know, Robert Sanborn has stepped down from the management of The Oakmark Fund. His very positive contribution to our long-term success is obvious, but it was time for a change. We expect him to continue to play a significant role in our firm. In the meantime, our careful planning leaves us in the enviable position of seamlessly changing the management of The Oakmark Fund. Additional changes in our "lineup" include adding a second manager to three of our funds.

The message should be very clear. We have the depth and commitment to bring a large group of talented individuals into the spotlight to help insure the long-term success of our fund family.

On many recent occasions, we have indicated a growing confidence that value investing will come back. This quarter, our buy list has expanded to levels not seen since 1990, and takeovers of "old economy" stocks at significant price premiums are accelerating. These are classic signs that our turn is near. Your patience will be rewarded.

We are happy to announce that in the coming months we will be making exciting improvements to our web site. In the future on www.oakmark.com, you will be able to purchase shares, change your address, or order duplicate statements on-line. You will also find a new page design with improved navigation to make the site easier to use. We appreciate your feedback on our current site and we used your valuable comments to develop these improvements.
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Victor Morgenstern
Chairman

 

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Robert M. Levy
President

April 6, 2000

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THE OAKMARK FAMILY OF FUNDS

Summary Information

Performance for Period
Ended
March 31, 2000		  The Oakmark
Fund		 The Oakmark
Select
Fund		 The Oakmark
Small Cap
Fund
3 Months (9.0%) 9.0% (1.5%)
6 Months (15.1%) 16.5% (3.5%) (a)
1 Year (18.1%) 12.8% (0.6%)
Average Annual Total
Return for:
3 Year		  

2.5%

  

28.3%

  

1.6%
5 Year 9.9% N/A N/A
Since inception 19.2% 31.8% 11.2%
Value of $10,000
from inception date		 $45,767
(8/5/91)		 $25,667
(11/1/96)		 $15,974
(11/1/95)
Top Five Holdings
as of March 31, 2000

Company and % of Total
Net Assets

 Fortune Brands, Inc. 4.8% Washington
Mutual, Inc.		 13.5% Catellus Development
Corporation		 6.8%
Washington
Mutual, Inc.		 4.1% USG Corporation 9.7% Ugly Duckling
Corporation		 5.3%
Brunswick
Corporation		 3.8% The Reynolds &
Reynolds Company		 8.3% ITT Educational
Services, Inc.		 4.7%
The Dun & Bradstreet
Corporation		 3.8% Toys 'R' Us, Inc. 8.2% National Data
Corporation		 4.4%
ACNielsen
Corporation		 3.8%
The Dun & Bradstreet
Corporation

6.9%

 People's Bank of
Bridgeport, CT

3.9%
Top Five Industries
as of March 31, 2000

Industries and % of Total
Net Assets

 Other Consumer
Goods & Services		 19.5% Banks & Thrifts 15.7% Real Estate 11.0%
Information Services 8.1% Information Services 11.2% Banks & Thrifts 10.2%
Food & Beverage 7.6% Retail 9.8% Insurance 7.5%
Banks & Thrifts 7.0% Building Materials
& Construction		 9.7% Food & Beverage 7.4%
Machinery & Industrial Processing 6.5% Computer Software 8.3% Retail 6.8%

 

Performance for Period
Ended
March 31, 2000		 The Oakmark
Equity and
Income Fund		 The Oakmark
Global
Fund		 The Oakmark
International
Fund		 The Oakmark
International
Small Cap Fund
3 Months 4.4% 0.8% (0.2%) (5.0%)
6 Months 8.0% (a) 9.6% (a) 8.9% (0.3%)
1 Year 12.7% N/A 22.4% 17.3%
Average Annual Total
Return for:
3 Year		 15.9% N/A 7.5% 8.4%
5 Year N/A N/A 13.9% N/A
Since inception 15.5% N/A 13.6% 10.2%
Value of $10,000
from inception date		 $18,924
(11/1/95)		 $10,061
(8/4/99)		 $26,012
(9/30/92)		 $15,387
(11/1/95)
Top Five Holdings
as of March 31, 2000

Company and % of Total
Net Assets

The Reynolds & Reynolds Company

6.1%

Department 56, Inc.

5.3%

Tomkins plc

4.8%

Krones AG

6.4%
Ceridian Corporation 4.4% Ceridian Corporation 5.1% Diageo plc 4.8% Fletcher Challenge Building 5.8%
Alamo Group Inc. 4.4% The Reynolds & Reynolds Company 5.0% Metso Oyj 4.7% GFI Industries SA 5.4%
Legacy Hotels Real Estate Investment Trust 3.8% NOVA Corporation 5.0% Somerfield plc 4.3% House Of Fraser Plc 4.9%
Catellus Development Corporation 3.6% Fletcher Challenge Building 4.7% Banco Latinoamericano de Exportaciones, S.A. 4.1% Royal Doulton plc 4.9%
Top Five Industries
as of March 31, 2000

Industries and % of Total
Net Assets

 U.S. Government Bonds 24.4% Retail 18.1% Banks & Thrifts 16.7% Production Equipment 12.4%
Real Estate 13.0% Information Services 13.6% Other Industrial Goods & Services 14.3% Retail 11.8%
Banks & Thrifts 7.1% Other Consumer Goods & Services 9.4% Food & Beverage 8.9% Other Industrial Goods & Services 8.6%
Computer Software 6.1% Banks & Thrifts 9.1% Household Products 8.4% Other Consumer Goods & Services 8.2%
Computer Services
 5.7% Other Industrial Goods & Services 8.1% Retail 6.0% Other Financial 8.2%
(a) During the six months ended March 31, 2000, Initial Public Offerings ("IPOs") contributed .34%, 1.6% and 10% to the performance of Small Cap, Equity and Income and Global, respectively. As the IPO environment changes and the total assets of the Funds grow, the impact of IPOs on performance will diminish.