"Nothing gives a better feeling to a money manager than making
money for his or her investors when almost everyone else is losing."Dear Fellow Shareholders:
"Nothing gives a better feeling to a money manager than making
money for his or her investors when almost everyone else is losing."
This quotation from Michael Steinhardt, one of the great investors of this era, captures our current feelings. All of our Funds have beaten their benchmarks, and only one has a negative return for the year. As a result of our strong team, our defined investment philosophy, and our disciplined process, our performance has allowed our shareholders to continue to meet their financial goals, even during this time of extreme turmoil. As always, we are committed to minimizing negative returns, the primary impediment to compounding assets and creating wealth.
As we enter 2002, we remain confident, though not complacent, about the positioning of our portfolios. The market's volatility and the opportunities created by it have caused two noteworthy outcomes in our funds. The Oakmark Fund has always focused on large companies. During the last several years, however, many large companies actually had mid-cap valuations (and did very well). Now, because of price declines, many large cap stocks meet our strict buy criteria. As you examine The Oakmark Fund portfolio, you will see it is both large company and large cap.
You should also note that in markets worldwide, the premium for higher quality, higher growth, non-tech stocks is historically depressed. This means more of our new buys have been better businesses than some of the stocks that have been sold after reaching our sell targets. This portfolio positioning is a significant reason why we are collectively confident entering 2002.
Although we are pleased with our performance in a difficult investing year, we do not live or work in a vacuum. Our thoughts and support are with those directly involved in the war effort and others struggling in a difficult economic environment. We hope that in 2002 we return to a more peaceful and prosperous world.
Thank you for your continued support.
Robert M. Levy
President and CEO
January 7, 2002
| Performance for Period Ended December 31, 20011 |
The Oakmark Fund |
The Oakmark Select Fund |
The Oakmark |
The Oakmark Equity and Income Fund |
||||
| 3 Months* | 10.82% | 8.30% |
18.67% |
7.93% | ||||
| 6 Months* | 0.84% | 4.17% | 0.82% | 4.87% | ||||
| 1 Year | 18.29% | 26.06% | 26.30% | 18.01% | ||||
| Average Annual Total Return for: 3 Year |
5.78% |
21.98% |
6.67% |
15.13% |
||||
| 5 Year | 10.24% | 26.73% |
8.17% | 16.77% | ||||
| Since Inception | 19.95% | 29.04% | 13.11% | 16.48% | ||||
| Value of $10,000 from inception date |
$66,479 (8/5/91) |
$37,359 (11/1/96) |
$21,391 (11/1/95) |
$25,635 (11/1/95) |
||||
| Top Five
Holdings as of December 31, 20012
Company and % of Total |
Washington Mutual, Inc. |
3.7% | Washington Mutual, Inc. |
15.5% | ITT Educational Services, Inc. |
4.5% | Watson Pharmaceuticals, Inc. |
3.0% |
| AT&T Corp. | 2.9% | H&R Block, Inc. | 7.6% | The PMI Group, Inc. | 4.1% | IMS Health Incorporated | 3.0% | |
| H&R Block, Inc. | 2.5% | Toys ‘R’ Us, Inc. | 5.7% | Catellus Development Corporation |
4.0% | Cooper Industries, Inc. | 2.9% | |
| The Kroger Co. | 2.4% | Electronic Data Systems Corporation |
4.8% | Ralcorp Holdings, Inc. | 4.0% | Rockwell Collins | 2.9% | |
| U.S. Bancorp | 2.3% | AT&T Corp. | 4.7% | Mentor Graphics Corporation |
3.7% | Plum Creek Timber Co., Inc. |
2.7% | |
| Top Five
Industries as of December 31, 2001
Industries and % of Total Net Assets |
Retail | 14.5% | Retail | 18.2% | Computer Software | 8.1% | U.S. Government Notes |
28.4% |
| Other Consumer Goods & Services | 7.6% | Bank & Thrifts | 15.5% | Bank & Thrifts | 7.6% | Retail | 7.8% | |
| Bank & Thrifts | 6.0% | Other Consumer Goods & Services | 11.3% | Food & Beverage | 6.8% | Oil & Natural Gas | 7.2% | |
| Computer Services | 5.6% | Information Services | 9.2% | Medical Products | 6.0% | Insurance | 5.4% | |
| Oil & Natural Gas | 5.5% | Computer Services | 8.8% | Real Estate | 5.8% | Computer Software | 5.2% | |
| Performance for Period Ended December 31, 20011 |
The
Oakmark Global Fund |
The
Oakmark International Fund |
The
Oakmark International Small Cap Fund |
|||
| 3 Months* | 25.37% |
17.24% |
19.19% |
|||
| 6 Months* | 4.44% |
–5.50% |
5.66% |
|||
| 1 Year | 20.05% | –5.13% |
12.98% |
|||
| Average Annual Total Return for: 3 Year |
N/A |
14.17% |
16.54% |
|||
| 5 Year | N/A | 7.42% | 6.72% | |||
| Since Inception | 14.50%3 | 11.69% | 8.63% | |||
| Value of $10,000 from inception date |
$13,880 (8/4/99) |
$27,819 (9/30/92) |
$16,671 (11/1/95) |
|||
| Top Five
Holdings as of December 31, 20012
Company and % of Total |
Novell, Inc. |
5.7% |
Metso Corporation |
3.8% |
Pacific Dunlop |
4.2% |
| Synopsys, Inc. | 5.4% | Hunter Douglas N.V. |
3.7% |
Copenhagen Airports A/S |
3.4% | |
| Michael Page International plc |
4.8% | Lotte Chilsung Beverage Co., Ltd. |
3.7% | Ducati Motor Holding S.p.A. |
3.3% | |
| ITT Educational Services, Inc. |
4.4% | Bance Popolare di Verona |
3.5% | United Services Group NV |
3.0% | |
| Ducati Motor Holding S.p.A. |
4.1% | Enodis plc | 3.1% | Lectra | 2.8% | |
| Top Five
Industries as of December 31, 2001
Industries and % of Total |
Computer Software | 11.2% | Banks & Thrifts | 12.2% | Food & Beverage | 11.0% |
| Retail | 8.2% | Food & Beverage | 9.1% | Diversified Conglomerates |
9.1% | |
| Banks & Thrifts | 8.0% | Other Industrial Goods & Services |
8.5% | Publishing | 7.4% | |
| Food & Beverage | 7.4% | Publishing | 7.8% | Retail | 6.7% | |
| Information Services | 7.0% | Chemicals | 5.3% | Human Resources | 5.7% | |
* Not annualized