THE OAKMARK INTERNATIONAL FUND Report from David G. Herro and Michael J. Welsh, Portfolio Managers

THE VALUE OF A $10,000 INVESTMENT IN THE OAKMARK INTERNATIONAL FUND FROM ITS INCEPTION (9/30/92) TO PRESENT (12/31/02) COMPARED TO THE MSCI WORLD EX U.S. INDEX23
		Average Annual Total Returns5
	(as of 12/31/02)
	Total Return Last 3 Months*	1-year	5-year	10-year	Since Inception (9/30/92)
Oakmark International Fund	8.99%	-8.46%	4.85%	9.75%	9.54%
MSCI World ex. U.S.	6.54%	-15.80%	-2.72%	4.17%	3.68%
MSCI EAFE3	6.45%	-15.94%	-2.89%	4.00%	3.50%
Lipper International Fund Index24	6.64%	-13.83%	-1.64%	5.55%	5.28%
The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
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 Fund was up 9% for the quarter, compared with 7% gains in the MSCI World ex-US and the Lipper International Fund indices.

Over the past twelve month's your Fund has generated a loss of 8%, relative to the larger declines of 16% in the MSCI World ex-US index and 14% in the Lipper International Fund Index.

Impact Players for 2002

Givaudan, the Swiss flavors and fragrances company, generated the largest positive impact on the Fund's NAV²² during 2002. Givaudan was spun-off from Roche Holdings in 2000, and remained somewhat neglected by investors. That changed this year as management's strong record in both operations and capital allocation was rewarded in the market with a higher share price.

Once again our Korean holdings were among the top performers for the year. Lotte Chilsung Beverage and Kumkang Korea Chemical were near the top in positive contribution to NAV. We have owned both of these companies for over five years and they continue to deliver solid price appreciation. And in our view, they are still cheap. Somerfield plc, the UK supermarket operator, continued to make slow but sure progress in restructuring their troubled Kwik Save chain. Another solid contributor for the year was Banco Popolare di Verona. High quality management is exceeding expectations in integrating their recent Novara acquisition.

By far the single biggest negative impact on NAV for the year came from Ericsson. As discussed in the Oakmark Global letter, the market continued to punish the stock in 2002 for the slow-down in telecommunication infrastructure spending, ignoring the company's strong market position and the significant headway management has made on cost reductions. The stock has rallied strongly from its low in the third quarter, contributing significantly to fourth quarter performance, and we continue to believe Ericsson is very well positioned to benefit from any return in telecommunications capital spending.

Another negative contributor was Unibanco, the Brazilian retail bank. The share price remains under pressure due to concerns about the new Brazilian government. We have sold our entire position as we found better risk-reward opportunities in a number of other financial services companies, all of which had significant share price declines. While still cheap, we felt companies such as Credit Suisse Group, BNP-Paribas, Daiwa Securities and San Paolo IMI are all more attractive at current prices than Unibanco.

Orbotech, the Israeli optical inspection specialist, was another negative contributor as a slump in electronics and technology spending hurt short-term results. We remain confident about the company's long-term prospects and the large gap between business value and the current market price.

Finally, another loser for the Fund was Cordiant Communications. As long-term shareholders will remember, we made significant profits on our first go-round with this company but, unfortunately, not this time. Though Cordiant remains statistically cheap, we believe increasing our ownership in Publicis Groupe, a much stronger French advertising holding company, and Aegis, the UK-based global media buyer, provides superior risk-reward opportunities in this sector.

Looking Forward

We remain optimistic based on the large number of attractive absolute return opportunities in the portfolio. We thank you for your continued confidence.

David G. Herro, CFA Portfolio Manager dherro@oakmark.com	Michael J. Welsh, CFA, CPA Portfolio Manager mwelsh@oakmark.com

January 6, 2003

Global Diversification—December 31, 2002 (Unaudited)

Schedule of Investments—December 31, 2002 (Unaudited)