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 (12/31/04) AS COMPARED TO THE STANDARD & POOR'S 500 INDEX3
	Annual Average Total Returns (as of 12/31/04)
	Total Return Last 3 Months*	1-year	5-year	Since Inception (11/1/96)
Oakmark Select Fund (Class I)	7.69%	9.73%	14.45%	20.62%
S&P 500	9.23%	10.88%	-2.30%	8.50%
S&P MidCap 4008	12.16%	16.48%	9.53%	14.46%
Lipper Mid Cap Value Index9	11.83%	19.54%	10.85%	11.28%
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.
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, like the stock market, had a very strong quarter, increasing in value by 8%. For the year, your Fund increased by 10%. Though we are pleased with the level of absolute returns, we are always disappointed when market indices and other mutual funds increase in value more than we do. Our belief that better values had emerged in large-cap, higher quality businesses did not help our performance in 2004. Last year, the market leaders were again smaller companies and companies in industries that benefited from the cyclic rebound in corporate earnings. The increasing performance gap between stocks of high quality and low quality businesses has strengthened our conviction that today's better values are generally in large, high quality companies. Typically we like these businesses, but because of large premium P/E⁷ multiples, we don't like them as stocks. Today, the P/E spreads across the market are very small, so the best performing businesses are likely to also be the best performing stocks. We believe that the portfolio is well-positioned to benefit from a return to higher P/E premiums for better businesses.

During the quarter, we sold two positions. We were displeased with Chiron's communications to shareholders regarding their flu vaccine problems, and Sprint reached—and then exceeded—our sell target as investors put a higher value on wireless customers than we did. Those stocks were replaced by McDonald's and Liberty Media.

Select Fund Re-opened
On November 10, 2004, The Oakmark Select Fund was again opened to new investors. The Fund closed to new investors in mid-2001 to prevent unchecked growth and its resulting loss of investment flexibility. For three years, that achieved our goal of relatively stable cash flow. But early in 2004, sales from existing investors began to exceed their additional purchases. By re-opening, we hope to restore a balance between purchases and sales. And for those who expressed concern that we would be flooded with cash from new investors, take comfort that since re-opening, redemptions have continued to somewhat exceed purchases. Turns out we were right when we said that if we ever re-opened, it would most likely be at a time when nobody cared!

Best wishes,

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

Schedule of Investments—December 31, 2004 (Unaudited)