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 (12/31/03) COMPARED TO THE MSCI WORLD EX U.S. INDEX20
		Average Annual Total Returns1
	(as of 12/31/03)
	Total Return Last 3 Months*	1-year	5-year	10-year	Since Inception (9/30/92)
Oakmark International Fund	15.75%	38.04%	13.46%	8.58%	11.81%
MSCI World ex. U.S.	17.00%	39.42%	0.46%	4.73%	6.45%
MSCI EAFE21	17.08%	38.59%	-0.05%	4.47%	6.22%
Lipper International Fund Index22	15.45%	36.00%	2.13%	5.31%	7.71%
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 gained 16% for the quarter, compared to the MSCI World ex U.S. Index which gained 17%. For the twelve months ended December 31, 2003 the Fund gained 38%, similar to the 39% and 36% returns of the MSCI World ex U.S. Index and the Lipper International Fund Index, respectively.

Big Contributors 2003

As we do at the end of every year we like to mention those stocks which had the most significant impact on your Fund's NAV⁸. Happily this year, nearly all were positive.

L.M. Ericsson, the Swedish telecom equipment manufacturer, had by far the most significant positive contribution, rebounding from a tough 2002. The stock more than tripled from its March, 2003 lows. The share price responded positively to the appointment and initial actions of new CEO Carl-Henric Svanberg, as well as to better than expected cash flow generation.

A number of our financials in the Fund also did extremely well. Sanpaolo IMI (Italy), BNP Paribas (France), Credit Suisse Group (Switzerland), and Daiwa Securities (Japan) all made substantial positive contributions to The Oakmark International Fund's return. In general, the market gave us a very good buying opportunity in March when share prices weakened to top up our positions in these names and others, as well as to add Credit Suisse to the portfolio.

The share price of Vivendi Universal (France) rose over the past twelve months in reflection of the excellent work done by the new management team, led by Chairman Jean-Rene Fourtou. Since taking over the company in the summer of 2002, this team has restored credibility and liquidity to a very tarnished enterprise, and has done so under very difficult market conditions.

Other significant winners for us in calendar 2003 included blue-chip recruitment company Michael Page plc (UK), German automaker BMW, global advertising and services giant Publicis Group (France), and media powerhouse Grupo Televisa (Mexico). The negative contributors to a lesser degree included Gambro AB A, FKI plc and Rolls-Royce Group plc.

Looking Forward

Given the quality of the holdings and the attractive valuation of the portfolio, we remain optimistic about potential price appreciation. 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

International Diversification—December 31, 2003 (Unaudited)

Schedule of Investments—December 31, 2003 (Unaudited)