THE OAKMARK SELECT FUND Report from Bill Nygren and Henry Berghoef, Portfolio Managers

THE VALUE OF A $10,000 INVESTMENT IN THE OAKMARK SELECT FUND FROM ITS INCEPTION (11/1/96) TO PRESENT (6/30/03) AS COMPARED TO THE STANDARD & POOR'S 500 INDEX4
	Average Annual Total Returns1
	(as of 6/30/03)
	Total Return Last 3 Months*	1-year	5-year	Since Inception (11/1/96)
Oakmark Select Fund	16.20%	7.39%	13.06%	22.08%
S&P 500	15.39%	0.25%	-1.61%	6.54%
S&P Mid Cap 4009	17.63%	-0.71%	7.14%	12.13%
Lipper Mid Cap Value Index10	19.18%	0.42%	3.50%	7.74%
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 Select Fund increased in value by 16% last quarter. That gain was slightly greater than the gain in the S&P 500. Calendar year-to-date, the Fund has increased in value by 16%, which also exceeds the S&P 500 return. We neither added any new stocks nor eliminated any existing positions last quarter. Strong performances by Xerox and AOL Time Warner allowed us to sell some shares and reduce them to normal weightings. We used the proceeds to increase our exposure to Mattel, Sprint, and Bristol Myers. The stock market is behaving as if it's a different world than we lived in back in March—and in some ways it is. The war ended faster than many expected. Tax rates are lower. Corporate earnings appear to be strengthening. Interest rates have continued to decline. But, perhaps most importantly, skeptics still hold unusually large cash balances. They argue that stocks are priced too steeply to produce the high returns that were enjoyed during the 1990's. We agree. But, with money funds yielding less than 1% and bonds yielding about 3%, equity returns—even if well below those of the 90's—could still far outdistance competing investments.

A brief comment about First Data Corp. (FDC) may help explain how we think about the current environment. We first bought FDC in July of 1998, when we thought the stock was selling at less than the value of its Western Union subsidiary—giving us the largest credit card processor and merchant processor for free. Our estimate of earnings this year is 113% higher than the earnings level five years ago. We continue to expect FDC to show significantly above-average growth and above-average consistency of that growth. For that reason, lower interest rates have increased our target P/E multiple for FDC more than for most stocks. FDC's stock price has increased by 185% since our first purchase but looks almost as undervalued today as when we first bought it. Dividend discount valuation models produce very large "fair value" P/E⁶ multiples for companies like FDC when discount rates are lowered to the levels current bond rates imply. We will continue to follow our disciplined sell process—increasing our sell targets to reflect both increasing earnings and lower required returns—to make sure we don't sell our highest quality stocks like FDC until the market more fully rewards their superiority.

Thank you for your continued support.

William C. Nygren, CFA Portfolio Manager bnygren@oakmark.com	Henry R. Berghoef, CFA Portfolio Manager berghoef@oakmark.com

Schedule of Investments—June 30, 2003 (Unaudited)