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 (6/30/02) AS COMPARED TO THE MSCI WORLD EX U.S. INDEX19 | ||||
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Average Annual
Total Returns3 |
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| Total Return Last 3 Months* |
1-year | 5-year | Since Inception (11/1/95) |
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| Oakmark International Small Cap Fund |
2.51% | 19.35% | 7.39% | 9.96% |
| MSCI World ex. U.S. | -2.24% | -9.42% | -1.33% | 2.61% |
| Lipper International Small Cap Average22 |
0.00% | -5.10% | 3.79% | 9.51% |
| 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 | ||||
The Oakmark International Small Cap Fund finished the quarter ending June 30, 2002 up 3%, compared to a 2% decline in the MSCI World ex-US Index and roughly in line with the 4% and 0% increases in the MSCI Small Cap World ex-US21 and Lipper International Small Cap Fund Average indices, respectively.
While small caps around the world have had a nice run relative to other asset classes, we still see tremendous value among the companies in your portfolio.
Portfolio Update
As many of you know, we closed The Oakmark International Small Cap Fund to new investors during the quarter. Limiting asset growth allows us to remain true to the Fund's mandate—to invest in small-cap companies based outside of the U.S.—and to maintain investment flexibility. We've closed other Funds in our family before, always with our shareholders' best interests in mind. Closing to new investors at this time leaves us ample capacity to allow existing investors to continue to add to their holdings. Generating superior investment results for our existing shareholders has always been our single-minded focus at The Oakmark Funds.
Looking Forward
Despite the strong performance of your Fund over the past few years, we still believe the portfolio remains undervalued. The appreciation potential of our companies remains significant. We want to thank you for your continued confidence.
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| David G. Herro, CFA Portfolio Manager dherro@oakmark.com |
Michael J. Welsh,
CFA, CPA |
July 8, 2002
| THE OAKMARK INTERNATIONAL SMALL CAP FUND |
Global Diversification—June 30, 2002
| THE OAKMARK INTERNATIONAL SMALL CAP FUND |
Schedule of Investments—June 30, 2002 (Unaudited)
| Name | Description | Shares Held | Market Value |
| Common Stocks—95.6% | |||
| Food & Beverage—6.2% | |||
| Campari Group | Soft Drinks, Wines, & | ||
| (Italy) (a) | Spirits Producer | 287,700 | $9,499,645 |
| Mikuni Coca-Cola | Soft Drink Manufacturer | ||
| Bottling Co., Ltd. (Japan) | 896,000 | 7,312,150 | |
| Baron De Ley, S.A. | Wines & Spirits Manufacturer | ||
| (Spain) (a) | 194,985 | 5,684,890 | |
| Hite Brewery Co., Ltd. | Brewer | ||
| (Korea) | 65,700 | 4,052,319 | |
| Grupo Continental, S.A. | Soft Drink Manufacturer | ||
| (Mexico) | 2,760,000 | 3,791,817 | |
| Alaska Milk Corporation | Milk Producer | ||
| (Philippines) | 49,394,000 | 2,257,451 | |
| 32,598,272 | |||
| Other Consumer Goods & Services—0.9% | |||
| Royal Doulton plc | Tableware & Giftware | ||
| (Great Britain) (a) | 22,373,000 | $3,155,784 | |
| Ilshin Spinning Co., Ltd. | Fabric & Yarn Manufacturer | ||
| (Korea) | 44,550 | 1,559,065 | |
| 4,714,849 | |||
| Apparel—0.7% | |||
| Kingmaker Footwear | Athletic Footwear | ||
| Holdings Limited | Manufacturer | ||
| (Hong Kong) | 10,721,000 | $3,505,055 | |
| Automobiles—1.6% | |||
| Ducati Motor Holding | Motorcycle Manufacturer | ||
| S.p.A. (Italy) (a) | 5,177,200 | $8,164,652 | |
| Broadcasting & Cable TV—1.0% | |||
| ABS-CBN Broadcasting | Television & Broadcasting | ||
| Corporation | Operator | ||
| (Philippines) (a) | 11,920,000 | $5,329,359 | |
| Broadcasting & Publishing—1.6% | |||
| Tamedia AG | TV Broadcasting & Publishing | ||
| (Switzerland) (a) | 115,780 | $8,150,241 | |
| Building Materials & Construction—4.1% | |||
| Fletcher Building Limited | Building Materials | ||
| (New Zealand) | Manufacturer | 13,616,500 | $18,226,536 |
| Grafton Group plc | Building Materials Distributor | ||
| (Ireland) | 723,000 | 3,135,550 | |
| 21,362,086 | |||
| Home Furnishings—3.2% | |||
| Natuzzi S.p.A. (Italy) (b) | Home Furnishings | 1,099,100 | $16,695,329 |
| Hotels & Motels—2.5% | |||
| Jarvis Hotels plc | |||
| (Great Britain) | Hotel Operator | 7,252,000 | $12,827,947 |
| Human Resources—3.8% | |||
| Solvus S.A. (Belgium) | Temporary Staffing Services | 763,120 | $13,915,131 |
| United Services Group | Temporary Staffing Services | ||
| NV (Netherlands) | 279,347 | 5,534,301 | |
| 19,449,432 | |||
| Marketing Services—1.9% | |||
| Asatsu-DK, Inc. (Japan) | Advertising Services Provider | 445,100 | $9,693,850 |
| Publishing—3.7% | |||
| Edipresse S.A. | Newspaper & Magazine | ||
| (Switzerland) | Publisher | 18,274 | $7,228,252 |
| Recoletos Grupo de | Publisher | ||
| Comunicacion, S.A. | |||
| (Spain) | 880,000 | 4,041,954 | |
| Matichon Public Company | Newspaper Publisher | ||
| Limited, Foreign Shares | |||
| (Thailand) | 2,039,500 | 3,287,933 | |
| Hollinger International | Newspaper Publisher | ||
| Inc. (United States) | 210,000 | 2,520,000 | |
| VLT AB, Class B (Sweden) | Newspaper Publisher | 182,250 | 1,810,096 |
| 18,888,235 | |||
| Retail—8.8% | |||
| Carpetright plc | Carpet Retailer | ||
| (Great Britain) | 2,137,700 | $19,395,683 | |
| D.F.S. Furniture Company | Furniture Retailer & Manufacturer | ||
| plc (Great Britain) | 1,972,100 | 12,374,856 | |
| Bulgari S.p.A. (Italy) | Jewelry Manufacturer & Retailer | 851,500 | 5,363,005 |
| House of Fraser Plc | Department Store | ||
| (Great Britain) | 2,279,000 | 2,458,737 | |
| Dairy Farm International | Supermarket Chain | ||
| Holdings Limited | |||
| (Hong Kong) (a) | 2,502,000 | 2,176,740 | |
| Jusco Stores (Hong Kong) | Department Stores | ||
| Co., Limited | |||
| (Hong Kong) | 4,102,000 | 2,169,396 | |
| Harvey Nichols plc | High Fashion Clothing Retailer | ||
| (Great Britain) | 493,400 | 1,534,867 | |
| 45,473,284 | |||
| Bank & Thrifts—6.8% | |||
| Jyske Bank A/S | Commercial Banking | ||
| (Denmark) (a) | 500,900 | $12,497,240 | |
| Vontobel Holding AG | Commercial Banking | ||
| (Switzerland) | 474,536 | 11,453,001 | |
| Banco Latinoamericano | Multinational Bank | ||
| de Exportaciones, S.A., | |||
| Class E (Panama) (b) | 888,700 | 11,153,185 | |
| 35,103,426 | |||
| Financial Services—4.4% | |||
| Julius Baer Holding Ltd., | Asset Management | ||
| Zurich (Switzerland) | 47,000 | $13,470,434 | |
| Van der Moolen Holding | International Trading Firm | ||
| N.V. (Netherlands) | 451,500 | 9,523,449 | |
| 22,993,883 | |||
| Insurance—0.5% | |||
| IPC Holdings, Ltd. | Reinsurance Provider | ||
| (Bermuda) | 87,700 | $2,678,358 | |
| Other Financial—2.7% | |||
| Ichiyoshi Securities Co., | Stock Broker | ||
| Ltd. (Japan) | 1,957,000 | $7,397,538 | |
| JCG Holdings Limited | Consumer Finance | ||
| (Hong Kong) | 11,623,000 | 6,929,318 | |
| 14,326,856 | |||
| Medical Products—3.6% | |||
| Ansell Limited (Australia) | Protective Rubber & Plastics | ||
| Products | 5,254,625 | $18,576,812 | |
| Computer Services—1.8% | |||
| Morse Plc (Great Britain) | Business & Technology Solutions | 3,451,300 | $9,420,568 |
| Computer Software—0.6% | |||
| Enix Corporation (Japan) | Entertainment Software | 146,600 | $2,819,701 |
| Computer Systems—0.9% | |||
| Lectra (France) (a) | Manufacturing Process Systems | 1,191,500 | $4,638,888 |
| Office Equipment—3.7% | |||
| Neopost SA (France) (a) | Mailroom Equipment Supplier | 480,700 | $19,094,219 |
| Airport Maintenance—7.5% | |||
| Kobenhavns Lufthavne | Airport Management | ||
| A/S (Copenhagen | & Operations | ||
| Airports A/S) (Denmark) | 283,700 | $21,836,979 | |
| Grupo Aeroportuario del | Airport Operator | ||
| Sureste S.A. de C.V. | |||
| (Mexico) (b) | 1,334,200 | 17,211,180 | |
| 39,048,159 | |||
| Diversified Conglomerates—3.1% | |||
| Pargesa Holding AG | Diversified Operations | ||
| (Switzerland) | 4,784 | $9,833,564 | |
| Tae Young Corp. (Korea) | Heavy Construction | 106,600 | 2,853,300 |
| Haw Par Corporation | Healthcare & | ||
| Limited (Singapore) | Leisure Products | 903,000 | 2,269,962 |
| Jardine Strategic Holdings | Diversified Operations | ||
| Limited (Bermuda) | 340,700 | 994,844 | |
| 15,951,670 | |||
| Instruments—1.0% | |||
| Vaisala Oyj, Class A | Atmospheric Observation | ||
| (Finland) | Equipment | 182,450 | $4,990,334 |
| Machinery & Industrial Processing—5.6% | |||
| Pfeiffer Vacuum | Vacuum Pump Manufacturer | ||
| Technology AG | |||
| (Germany) | 451,400 | $16,818,067 | |
| Alfa Laval (Sweden) (a) | Filtration & Separation Equipment | 959,700 | 9,583,770 |
| Carbone Lorraine SA | Electrical Systems | ||
| (France) | Manufacturer | 72,700 | 2,264,354 |
| 28,666,191 | |||
| Other Industrial Goods & Services—4.4% | |||
| Schindler Holding AG | Elevator & Escalator | ||
| (Switzerland) | Manufacturer | 67,800 | $12,272,727 |
| GFI Industries SA (France) | Industrial Fastener Manufacturer | 309,913 | 7,685,518 |
| Coats plc (Great Britain) | Textile Manufacturer | 2,872,000 | 2,430,630 |
| 22,388,875 | |||
| Production Equipment—2.6% | |||
| Interpump Group S.p.A. | Pump & Piston Manufacturer | ||
| (Italy) | 2,707,300 | $11,260,860 | |
| NSC Groupe (France) | Textile Equipment Manufacturer | 17,466 | 2,010,754 |
| 13,271,614 | |||
| Transportation Services—1.9% | |||
| Mainfreight Limited | Logistics Services | ||
| (New Zealand) | 7,059,751 | $4,776,504 | |
| Bergesen d.y. ASA, Class A | Tanker Operator | ||
| Shares (Norway) | 187,000 | 3,977,454 | |
| DelGro Corporation | Bus, Taxi, & Car Leasing | ||
| Limited (Singapore) | 1,066,000 | 1,237,254 | |
| 9,991,212 | |||
| Chemicals—4.5% | |||
| Gurit-Heberlein AG | Chemical Producer | ||
| (Switzerland) | 30,424 | $23,456,423 | |
| Total Common Stocks (Cost: $471,004,239) | 494,269,780 | ||
Par Value |
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| Short Term Investments—4.2% | |||
| U.S. Government Bills—2.0% | |||
| United States Treasury Bills, 1.64% due 7/5/2002 | $10,000,000 | $9,997,267 | |
| Total U.S. Government Bills (Cost: $9,997,267) | 9,997,267 | ||
| Repurchase Agreements—2.2% | |||
| IBT Repurchase Agreement, 1.85% due | |||
7/1/2002, repurchase price $11,501,773 |
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| collateralized by U.S. Government | |||
| Agency Securities | $11,500,000 | $11,500,000 | |
| Total Repurchase Agreement (Cost: $11,500,000) | 11,500,000 | ||
| Total Short Term Investments (Cost: $21,497,267) | 21,497,267 | ||
| Total Investments (Cost $492,501,506)—99.8% | $515,767,047 | ||
| Foreign Currencies (Proceeds $756,429)—0.2% | $766,497 | ||
| Other Assets In Excess Of Other Liabilities—0.0% | 250,292 | ||
| Total Net Assets—100% | $516,783,836 | ||
| (a) | Non-income producing security. |
| (b) | Represents an American Depository Receipt. |
