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 (6/30/04) AS COMPARED TO THE STANDARD & POOR'S 500 INDEX4
	Annual Average Total Returns
	(as of 06/30/04)
	Total Return Last 3 Months*	1-year	5-year	Since Inception (11/1/96)
Oakmark Select Fund (Class I)	-1.53%	12.56%	11.68%	20.79%
S&P 500	1.72%	19.11%	-2.20%	8.10%
S&P MidCap 4008	0.97%	27.99%	9.04%	14.08%
Lipper Mid Cap Value Index9	2.20%	31.51%	9.32%	10.58%
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.
The performance data quoted represents past performance. The above performance information for the Fund does not reflect the imposition of a 2% redemption fee on shares held for 90 days or less to deter market timers. If reflected, the fee would reduce the performance quoted. Past performance does not guarantee future results. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Average annual total return measures annualized change, while total return measures aggregate change. To obtain current month end performance data, call 1-800-OAKMARK or visit www.oakmark.com.
* Not annualized

The Oakmark Select Fund decreased in value by 2% in the quarter, trailing the S&P 500. Good increases in Burlington Resources, which benefits from higher natural gas prices, and in Gap Stores, which showed higher sales and earnings due to better merchandising, were not enough to offset our losers. On the loss side, we had Moody's, which fell nearly 9% as prospects for higher interest rates made it unlikely that they would produce another year of abnormally high earnings gains. We continue to believe Moody's has an extremely favorable long-term outlook as they serve a growth industry, namely the growing global demand for debt.

Last quarter I mentioned that Washington Mutual had the biggest positive effect on quarterly performance, not because it increased the most, but because a small increase in price combined with the very heavy portfolio weighting created the biggest impact. Unfortunately, we saw a reversal this quarter. Washington Mutual stock declined by 9%, which almost accounted for the entire Oakmark Select Fund second quarter loss. At one point in the quarter, Washington Mutual showed a good gain due to speculation the company would be acquired. The acquisition of several retail banks suggested a rising value for franchises similar to Washington Mutual's. Given their strong retail banking growth, the assumption (with which we agree) was that a buyer would need to pay a healthy premium to acquire the company. Unfortunately, however, late in the quarter Washington Mutual announced very disappointing results in their mortgage banking business leading to a reduction in expected earnings. The stock more than gave back its gains. We are carefully monitoring Washington Mutual's results, but we still believe the value of the retail banking franchise exceeds the current stock price. With a dividend yield of 4¹/₂% we think the cost is small of waiting for a mortgage banking turnaround, further retail growth, or eventual acquisition of the company.

During the quarter, we sold Kroger and added Limited Brands. For a small increase in price-earnings multiple, we believe we now own a much stronger franchise.

Best wishes,

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

Schedule of Investments—June 30, 2004 (Unaudited)