THE OAKMARK GLOBAL FUND Report from Gregory L. Jackson and Michael J. Welsh, Portfolio Managers

THE VALUE OF A $10,000 INVESTMENT IN THE OAKMARK GLOBAL FUND FROM ITS INCEPTION (8/4/99) TO PRESENT (6/30/03) AS COMPARED TO THE MSCI WORLD INDEX16
	Average Annual Total Returns1
	(as of 6/30/03)
	Total Return Last 3 Months*	1-year	3-year	Since Inception (8/4/99)
Oakmark Global Fund	33.51%	12.89%	16.05%	13.19%3
MSCI World	17.04%	-2.37%	-12.97%	-7.33%
Lipper Global Fund Index17	17.49%	-4.05%	-11.80%	-4.38%
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

Fellow Shareholders:

The Oakmark Global Fund was up 34% for the three-month period ending June 30, 2003. This compares to gains of 17% for the MSCI World Index and 17% for the Lipper Global Fund Index. For the current calendar year to date, The Oakmark Global Fund is up 19%, significantly better than the indices.

Most importantly, since inception, your Fund has generated a positive return of 13% versus declines of 7% for the MSCI World Index and 4% for the Lipper Global Fund Index.

It was an exceptionally good quarter for your Fund, with a number of our largest positions experiencing hefty price moves: EFunds Corp, Concord EFS, Interpublic Group, Synopsys, and L.M. Ericsson all made significant positive contributions to the Fund's NAV¹⁸ for the Quarter. It is interesting to note that each of these stocks, other than Concord EFS, had been among the worst performers for the Fund in the previous quarter. We think this illustrates the degree of fear that gripped equity investors worldwide during March, 2003.

Volatility in Markets

What was our response to the large equity price declines in March? We believed the market was providing us a very good short-term opportunity to beef up our favorite positions at attractive prices. Discipline is paramount. As business analysts our most important task is to stay focused on the underlying per-share value of our companies. We try to insulate ourselves to the extent possible from the short-term white noise constantly being generated in the markets. We concern ourselves only with information that is relevant to the long-term value of our businesses.

As portfolio managers, we must have the discipline to be buyers when we recognize a significant gap between value and current market prices. This often means buying in an overriding environment of fear and uncertainty. It also means buying individual companies when they are facing short-term problems or uncertainties.

We have made this basic statement many times in the past, but it bears repeating: Long-term investors should welcome volatility in equity markets because it creates opportunity.

Current Portfolio

As you are aware, the geographic or industry weightings in The Oakmark Global Fund are a fall-out of stock selection. As portfolio managers we try to construct a portfolio of the most attractive absolute return opportunities we can find around the world, regardless of size, industry, or nationality. We do not attempt to make macroeconomic "calls" on particular countries, regions, or industries. As in all Oakmark Funds, we are bottom-up stock pickers.

It is interesting to note however that the geographic weightings of the Fund have remained fairly constant over the past few quarters, with the weighting in US companies around 40% of the portfolio since the beginning of 2003. This is low compared to one year ago when the US accounted for over 50% of the portfolio. It is reflective of the fact that we are finding, in general, what we believe to be better opportunities in overseas markets.

Many of our holdings overseas have not had the same-sized price moves as our US holdings. Over the past year a reasonable component of our return from these holdings has come from currency appreciation. Remember, a US dollar-based investor owning overseas companies (and holding these companies in the currency of the underlying country) benefits from a declining US dollar exchange rate.

Market worries about currencies helped us afford the newest addition to the portfolio, Switzerland-based Nestle. It is the quintessential multinational—you could say that Switzerland is just the company's mailing address. It is one of the largest food companies in the world, also with leadership positions in pet food, coffee and bottled water. Nestle's geographic spread is arguably one of the best of any major multinational. Perrier, Nestea, Carnation, Lean Cuisine, Purina, and Butterfinger are but a few of the names you will probably recognize.

It is an enviable mix and spread of businesses. Management is focused on improving profitability and returns. They have detailed concrete restructuring steps including rationalizing manufacturing, which should lift operating profit margins. We think they are in the process of making a very good economic enterprise even better.

We are able to purchase this company currently because of market fears of a prolonged global slowdown and worries of negative currency impacts on Nestle's operating results. Because of these concerns the Company is trading just below 10x operating profit.

This brings home the comments we made in the first section of this letter about being disciplined buyers. Nestle is not a business you can buy when the market perceives smooth sailing—the share price is unlikely to trade at our required discount to value.

Nestle is a good example of the quality businesses at attractive prices we currently see in the global equity markets. Thank you for your continued confidence and support.

Gregory L. Jackson Portfolio Manager gjackson@oakmark.com	Michael J. Welsh, CFA, CPA Portfolio Manager mwelsh@oakmark.com

Global Diversification—June 30, 2003 (Unaudited)

Schedule of Investments—June 30, 2003 (Unaudited)