THE OAKMARK
INTERNATIONAL
SMALL CAP FUND
Report from David G. Herro and
Michael J. Welsh, Portfolio Managers
THE OAKMARK
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| THE VALUE OF A $10,000 INVESTMENT IN THE OAKMARK INTERNATIONAL SMALL CAP FUND FROM ITS INCEPTION (11/1/95) TO PRESENT (3/31/02) AS COMPARED TO THE MSCI WORLD EX U.S. INDEX19 | ||||
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Average Annual
Total Returns2 |
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| Total Return Last 3 Months* |
1-year | 5-year | Since Inception (11/1/95) |
|
| Oakmark International Small Cap Fund |
10.19% | 20.60% | 8.74% | 9.94% |
| MSCI World ex. U.S. | 0.57% | -8.08% | 1.57% | 3.08% |
| Lipper International Small Cap Average22 | 4.55% | -4.98% | 5.76% | 9.72% |
| Past performance is no guarantee of future results. Investment return and principal value vary, and you may have a gain or loss when you sell shares. Average annual total return measures annualized change, while total return measures aggregate change. | ||||
| * Not annualized | ||||
Portfolio Update
The biggest country weighting increase from last quarter was in Switzerland, which jumped to 12% of the Fund from a little over 7% at the end of December. The share prices of Swiss small caps were hit in the aftermath of September 11th, and many failed to participate in the subsequent Continental European market rallies. This has led to a good buying opportunity.
We have been steadily accumulating shares of all our Swiss companies and added a new name during the quarter, Schindler Holding. Schindler is the world's second largest elevator company, just ahead of Kone (a long-time Oakmark International Fund holding). The share price has stagnated due primarily to lagging technology, slowdowns in their Brazilian and Chinese operations, and the legacy of an insular family-company culture.
Despite the strong performance of your Fund over the past few years, we still believe there are significant opportunities in the market, and that the portfolio remains undervalued. We want to thank you for your continued confidence.
David G. Herro, CFA
Portfolio Manager
DGH100@earthlink.net
Michael J. Welsh, CFA, CPA
Portfolio Manager
102521.2142@compuserve.com
April 4, 2002
| THE OAKMARK INTERNATIONAL SMALL CAP FUND |
International Diversification—March 31, 2002
| THE OAKMARK INTERNATIONAL SMALL CAP FUND |
Schedule of Investments—March 31, 2002 (Unaudited)
| Name | Description | Shares Held | Market Value |
| Common Stocks—95.0% | |||
| Food & Beverage—8.6% | |||
| Mikuni Coca-Cola | Soft Drink Manufacturer | ||
| Bottling Co., Ltd. (Japan) | 923,000 | $6,993,742 | |
| Campari Group (Italy), (a) | Soft Drinks, Wines, & Spirits Producer | 256,300 | 6,983,718 |
| Baron De Ley, S.A. | Wines & Spirits Manufacturer | ||
| (Spain), (a) | 194,985 | 5,075,352 | |
| Hite Brewery Co., Ltd. | Brewer | ||
| (Korea) | 65,700 | 4,050,340 | |
| Grupo Continental, S.A. | Soft Drink Manufacturer | ||
| (Mexico) | 1,728,000 | 3,161,689 | |
| Alaska Milk Corporation | Milk Producer | ||
| (Philippines), (c) | 49,394,000 | 2,033,073 | |
| 28,297,914 | |||
| Apparel—1.1% | |||
| Kingmaker Footwear | Athletic Footwear Manufacturer | ||
| Holdings Limited | |||
| (Hong Kong) | 13,505,000 | $3,636,078 | |
| Retail—6.6% | |||
| Carpetright plc | Carpet Retailer | ||
| (Great Britain) | 915,700 | $8,462,682 | |
| House of Fraser Plc | Department Store | ||
| (Great Britain) | 4,376,000 | 5,982,169 | |
| Jusco Stores | Department Stores | ||
| (Hong Kong) Co., | |||
| Limited (Hong Kong) | 5,486,000 | 2,532,081 | |
| Dairy Farm International | Supermarket Chain | ||
| Holdings Limited | |||
| (Singapore), (a) | 2,502,000 | 1,801,440 | |
| Harvey Nichols plc | High Fashion Clothing Retailer | ||
| (Great Britain) | 493,400 | 1,608,958 | |
| Bulgari S.p.A. (Italy) | Jewelry Manufacturer & Retailer | 79,000 | 671,916 |
| Signet Group plc | Jewelry Retailer | ||
| (Great Britain) | 389,000 | 661,954 | |
| 21,721,200 | |||
| Household Products—2.0% | |||
| D.F.S. Furniture Company plc (Great Britain) |
Furniture Retailer & Manufacturer | 966,600 | $6,586,260 |
| Home Furnishings—2.4% | |||
| Industrie Natuzzi S.p.A. | Home Furniture Manufacturer | ||
| (Italy), (b) | 522,900 | $7,712,775 | |
| Office Equipment—1.4% | |||
| Neopost SA (France), (a) | Mailroom Equipment Supplier | 139,300 | $4,729,437 |
| Other Consumer Goods & Services—0.8% | |||
| Ilshin Spinning Co., Ltd. | Fabric & Yarn Manufacturer | ||
| (Korea) | 44,550 | $1,839,962 | |
| Royal Doulton plc | Tableware & Giftware | ||
| (Great Britain), (a)(c) | 4,387,000 | 531,003 | |
| Royal Doulton plc, Rights | Tableware & Giftware | ||
| (Great Britain) | 13,161,000 | 93,706 | |
| 2,464,671 | |||
| Bank & Thrifts—2.6% | |||
| Banco Latinoamericano | Multinational Bank | ||
| de Exportaciones, S.A., | |||
| Class E (Panama), (b) | 390,600 | $8,573,670 | |
| Insurance—0.9% | |||
| IPC Holdings, Ltd. | Reinsurance Provider | ||
| (Bermuda) | 87,700 | $2,853,758 | |
| Other Financial—3.7% | |||
| Ichiyoshi Securities Co., | Stock Broker | ||
| Ltd. (Japan) | 1,861,000 | $7,113,710 | |
| JCG Holdings Limited | Consumer Finance | ||
| (Hong Kong) | 8,291,000 | 4,996,019 | |
| 12,109,729 | |||
| Hotels & Motels—3.1% | |||
| Jarvis Hotels plc | Hotel Operator | ||
| (Great Britain) | 6,395,000 | $10,062,663 | |
| Human Resources—5.6% | |||
| Solvus S.A.(Belgium) | Temporary Staffing Services | 566,445 | $10,577,397 |
| United Services Group NV | Temporary Staffing Services | ||
| (Netherlands) | 388,747 | 7,699,140 | |
| 18,276,537 | |||
| Marketing Services—2.5% | |||
| Asatsu-DK Inc. (Japan) | Advertising Services Provider | 381,400 | $8,022,814 |
| Computer Software—0.8% | |||
| Enix Corporation (Japan) | Entertainment Software | 146,600 | $2,542,165 |
| Computer Systems—1.6% | |||
| Lectra (France), (a) | Manufacturing Process Systems | 1,084,000 | $5,237,403 |
| Broadcasting & Cable TV—1.7% | |||
| ABS-CBN Broadcasting Corporation (Philippines) |
Television & Broadcasting Operator | 8,678,000 | $5,698,020 |
| Broadcasting & Publishing—0.9% | |||
| Tamedia AG (Switzerland) | TV Broadcasting & Publishing |
42,200 | $2,931,078 |
| Publishing—5.4% | |||
| Edipresse S.A. (Switzerland) | Newspaper & Magazine Publisher | 18,274 | $5,749,611 |
| Recoletos Grupo de | |||
| Comunicacion, S.A. | Publisher | ||
| (Spain), (a) | 880,000 | 4,443,288 | |
| Matichon Public Company | Newspaper Publisher | ||
| Limited, Foreign Shares | |||
| (Thailand), (c) | ` | 2,039,500 | 2,999,265 |
| Hollinger International Inc. | Newspaper Publisher |
||
| (United States) | 210,000 | 2,753,100 | |
| VLT AB, Class B (Sweden) | Newspaper Publisher | 182,250 | 1,634,135 |
| 17,579,399 | |||
| Automobiles—2.6% | |||
| Ducati Motor Holding | Motorcycle Manufacturer | ||
| S.p.A. (Italy), (a) | 5,177,200 | $8,428,112 | |
| Transportation Services—2.8% | |||
| Mainfreight Limited | Logistics Services | ||
| (New Zealand), (c) | 6,228,551 | $4,118,319 | |
| Bergesen d.y. ASA, | Tanker Operator | ||
| Class A Shares (Norway) | 187,000 | 3,550,472 | |
| DelGro Corporation | Bus, Taxi, & Car Leasing | ||
| Limited (Singapore) | 1,066,000 | 1,520,421 | |
| 9,189,212 | |||
| Airport Maintenance—7.4% | |||
| Grupo Aeroportuario | Airport Operator | ||
| del Sureste S.A. de C.V. | |||
| (Mexico), (a)(b) | 814,300 | $12,295,930 | |
| Kobenhavns Lufthavne A/S (Copenhagen Airports A/S) (Denmark) |
Airport Management & Operations | 166,000 | 11,863,394 |
| 24,159,324 | |||
| Instruments—0.9% | |||
| Vaisala Oyj, ClassA | Atmospheric Observation Equipment | ||
| (Finland) | 126,000 | $2,961,611 | |
| Machinery & Industrial Processing—4.8% | |||
| Pfeiffer Vacuum | Vacuum Pump Manufacturer | ||
| Technology AG | |||
| (Germany) | 212,500 | $7,492,172 | |
| ASM Pacific Technology | Semiconductor Machinery | ||
| Limited (Hong Kong) | 2,482,000 | 6,046,091 | |
| Carbone Lorraine SA | Electrical Systems Manufacturer | ||
| (France) | 72,700 | 2,151,826 | |
| 15,690,089 | |||
| Building Materials & Construction—3.2% | |||
| Fletcher Building Limited | Building Materials Manufacturer | ||
| (New Zealand) | 6,349,000 | $7,920,151 | |
| Grafton Group plc | Building Materials Distributor | ||
| (Ireland) | 723,000 | 2,454,690 | |
| 10,374,841 | |||
| Chemicals—5.3% | |||
| Gurit-Heberlien AG | Chemical Producer | ||
| (Switzerland) | 20,764 | $14,175,482 | |
| Taiyo Ink Mfg. Co., Ltd. | Manufacturer of Resist Inks | ||
| (Japan) | 96,000 | 3,228,107 | |
| 17,403,589 | |||
| Production Equipment—2.6% | |||
| Interpump Group S.p.A. | Pump and Piston Manufacturer | ||
| (Italy) | 1,780,200 | $7,299,338 | |
| NSC Groupe (France) | Textile Equipment Manufacturer | 17,466 | 1,368,452 |
| 8,667,790 | |||
| Other Industrial Goods & Services—5.5% | |||
| Schindler Holding AG (Switzerland) |
Elevator & Escalator Manufacturer | 5,310 | $9,299,199 |
| GFI Industries SA (France) | Industrial Fastener Manufacturer | 296,271 | 6,705,887 |
| Coats plc (Great Britain) | Textile Manufacturer | 2,872,000 | 2,075,537 |
| 18,080,623 | |||
| Diversified Conglomerates—8.2% | |||
| Pacific Dunlop Limited | Diversified Manufacturer | ||
| (Australia) | 19,754,626 | $12,861,311 | |
| Pargesa Holding AG | Diversified Operations | ||
| (Switzerland) | 3,384 | 7,362,636 | |
| Haw Par Corporation | Healthcare & Leisure Products | ||
| Limited (Singapore) | 903,000 | 2,076,368 | |
| Jardine Strategic Holdings | Diversified Operations | ||
| Limited (Bermuda) | 340,700 | 902,855 | |
| Tae Young Corp. (Korea) | Heavy Construction | 106,600 | 3,547,958 |
| 26,751,128 | |||
| Total Common Stocks (Cost: $282,324,079) | 310,741,890 | ||
Par Value |
|||
| Short Term Investments—6.3% | |||
| U.S. Government Bills—3.4% | |||
| United States Treasury Bills, 1.71% - 1.76% | |||
| due 4/4/2002 - 4/25/2002 | 11,000,000 | $10,991,361 | |
| Total U.S. Government Bills (Cost: $10,991,460) | 10,991,361 | ||
| Commercial Paper—1.2% | |||
| ChevronTexaco Corporation, 1.79% | |||
| due 4/5/2002 | 4,000,000 | $4,000,000 | |
| Total Commercial Paper (Cost: $4,000,000) | 4,000,000 | ||
| Repurchase Agreements—1.7% | |||
| State Street Repurchase Agreement, 1.75% due 4/1/2002, | |||
| repurchase price $5,723,113 collateralized by U.S. | |||
| Treasury Bonds | 5,722,000 | 5,722,000 | |
| Total Repurchase Agreements (Cost: $5,722,000) | 5,722,000 | ||
| Total Short Term Investments (Cost: $20,713,460) | 20,713,361 | ||
| Total Investments (Cost $303,037,539)—101.3% (d) | $331,455,251 | ||
| Foreign Currencies (Proceeds $65,441)—0.0% | $65,370 | ||
| Other Liabilities In Excess Of Other Assets—(1.3)% (e) | (4,435,109) | ||
| Total Net Assets—100% | $327,085,512 | ||
| (a) | Non-income producing security. |
| (b) | Represents an American Depository Receipt. |
| (c) | See footnote number five in the Notes to Financial Statements regarding transactions in affiliated issuers. |
| (d) | At March 31, 2002, net unrealized appreciation of $28,417,642, for federal income tax purposes, consisted of gross unrealized appreciation of $38,942,553 and gross unrealized depreciation of $10,524,911. |
| (e) | Includes transaction hedges. |
See accompanying notes to financial statements.
