This material must be preceded or accompanied by a prospectus. To order a prospectus, which explains management fees and expenses and the special risks of investing in the funds, visit www.oakmark.com or call 1-800-OAKMARK. Please read the prospectus carefully before investing.

The discussion of investments and investment strategy of the funds represents the investments of the funds and the views of fund managers and Harris Associates L.P., the funds' investment adviser, at the time of this article, and are subject to change without notice.

The performance data quoted represents past performance. The above performance 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.

The performance information for Class I shares of The Oakmark Fund, The Oakmark Select Fund, The Oakmark Equity & Income Fund, The Oakmark Global Fund, The Oakmark International Fund and The Oakmark International Small Cap Fund does not reflect the imposition of a 2% redemption fee on shares held by an investor for 90 days or less. The purpose of this redemption fee is to deter market timers.

Investing in value stocks presents the risk that value stocks may fall out of favor with investors and underperform growth stocks during given periods.

The Oakmark Select Fund is open to existing shareholders and investors who purchase directly from Oakmark.

Because the Oakmark Select Fund is non-diversified, the performance of each holding will have a greater impact on the Fund's total return, and may make the Fund's returns more volatile than a more diversified fund.

The Oakmark Equity and Income Fund closed to certain new investors as of 5/7/04.

Equity and Income invests in medium- and lower-quality debt securities that have higher yield potential but present greater investment and credit risk than higher-quality securities, which may result in greater share price volatility. An economic downturn could severely disrupt the market in medium or lower grade debt securities and adversely affect the value of outstanding bonds and the ability of the issuers to repay principal and interest.

The Oakmark Global Fund and The Oakmark International Fund closed to certain new investors as of 12/15/03.

The Oakmark International Small Cap Fund closed to new investors as of 5/10/02.

Investing in foreign securities represents risks which in some way may be greater than in U.S. investments. Those risks include: currency fluctuation; different regulation, accounting standards, trading practices and levels of available information; generally higher transaction costs; and political risks.

The stocks of smaller companies often involve more risk than the stocks of larger companies. Stocks of small companies tend to be more volatile and have a smaller public market than stocks of larger companies. Small companies may have a shorter history of operations than larger companies, may not have as great an ability to raise additional capital and may have a less diversified product line, making them more susceptible to market pressure.

DISCLOSUREREGARDING THE BOARD OF TRUSTEES' APPROVAL OF THE INVESTMENT ADVISORY CONTRACT FOR EACH OF THE OAKMARK FUNDS

Members of the board of trustees of The Oakmark Funds (the "Board"), over seventy-five percent of whom are not affiliated with the Funds' adviser ("Independent Trustees"), and the Board's committee on management contracts (the "Committee"), which is comprised solely of Independent Trustees, met numerous times over the course of nine months to consider each Fund's investment advisory contract. At each of those meetings, the Committee was advised by, and met in executive session with, independent legal counsel. The Committee and the other Independent Trustees received and reviewed a substantial amount of information provided by the Funds' adviser (the "Adviser") and third parties in response to the Committee's requests. Based on its evaluation of that information and other information, the Board, including a majority of the Independent Trustees, at a meeting held on October 28, 2004, approved continuation of the investment advisory agreement for each Fund for a period through October 31, 2005.

In considering the contracts and reaching its conclusions, the Board reviewed and analyzed various factors that it determined were relevant, including each of the factors described below.

1. Nature, Extent and Quality of Services

The Board's analysis of the nature, extent and quality of the Adviser's services to the Funds took into account the knowledge gained from the Board's regular meetings with management throughout the prior year. In addition, the Board reviewed the Adviser's resources and key personnel involved in providing investment management services to the Funds, including the time that investment personnel devote to each Fund and the breadth and quality of their in-house research. The Board also considered the Adviser's performance of other services for each Fund, such as selecting broker-dealers for executing portfolio transactions, serving as the Fund's administrator, monitoring adherence to the Fund's investment restrictions, producing shareholder reports, providing support services for the Board and Board committees and overseeing the activities of other service providers, including monitoring compliance with various Fund policies and procedures and with applicable securities laws and regulations. The Board concluded that the nature, extent and quality of the services provided by the Adviser to each Fund were appropriate and that each Fund was likely to continue to benefit from services provided under its contract with the Adviser.

2. Investment Performance of the Adviser and the Fund

In considering the performance of each Fund and the Adviser, the Board reviewed information provided by Lipper Inc. ("Lipper"), an independent data service provider. Lipper was commissioned by the Board to prepare a study comparing each Fund's performance and expenses with those of the Fund's peers and of the Lipper universe of similar funds. A representative from Lipper attended a meeting of the Committee to present the information and respond to questions from the Committee members. Regarding Fund performance, Lipper ranked four of the six Oakmark Funds in the top quintile versus their respective peers for total return for the one-, three-and five-year periods ended March 31, 2004, as applicable. Of the two remaining Funds, the Select Fund was in the top quintile for each of the periods except the one-year period, and the Oakmark Fund was at or above the middle quintile for each period except the one-year period. The Board considered the Adviser's representation that the relative performance of those two Funds reflected the Adviser's strict "value" investment philosophy, which also was responsible for the Funds' stronger relative long-term performance. In addition to comparing each Fund's performance to that of its peers, the Board also considered the performance of other funds advised or sub-advised by the Adviser. After considering all of the information, the Board concluded that, although past performance cannot be a guarantee of future performance, the Funds and their shareholders were benefiting from the Adviser's investment management of each Fund.

3. Costs of Services Provided and Profits Realized by the Adviser

The Board examined the fee and expense information for each Fund as compared to that of other comparable funds and noted that the information provided by Lipper indicated that the Adviser's management fees, as a percentage of average net assets, varied from the second to the fifth quintile of management fees (the first quintile reflecting the lowest fees) within a group of mutual funds of similar size, character and investment strategy. The Board also evaluated the expense ratios for comparable funds and determined that five of the six Funds' expense ratios were at or near the median and the Oakmark Fund was in the fifth quintile of expense ratios. Although the management fees and expense ratio of the Oakmark Fund were somewhat higher than the median figures for its peer group, the Board noted that the Fund's management fee as a percentage of average net assets and its total expense ratio were at their lowest points since the inception of the Fund in 1991.

The Board also reviewed the Adviser's management fees for its institutional separate accounts and for its subadvised funds (funds for which the Adviser provides portfolio management services only). In most instances sub-advisory and institutional separate account fees are lower than each Fund's management fee. However, the Board noted that the Adviser performs significant additional services for the Funds that it does not provide to those other clients, including administrative services, oversight of the Funds' other service providers, trustee support, risk management, regulatory compliance and numerous other services. In addition, the Board reviewed Lipper's report on the mutual fund industry's subadvisory arrangements. That report compared the fees paid for subadvisory portfolio management services to the total management fees paid by mutual fund shareholders to an adviser.

The Board also considered the Adviser's costs in serving as the Fund's investment adviser and manager, including costs associated with the personnel and systems necessary to manage the Funds. Finally, the Board considered the pre-tax profits realized by the Adviser and its affiliates from their relationship with each Fund, as well as the financial condition of the Adviser.

The Board concluded that the management fee, as well as the total expenses paid by each Fund to the Adviser and its affiliates, were reasonable in light of the services provided and the performance of each Fund achieved by the Adviser over various time periods, and that the other expenses of each Fund were also reasonable.

4. Economies of Scale and Fee Levels Reflecting Those Economies

The Board considered the extent to which each Fund's management fee reflected economies of scale for the benefit of Fund shareholders. The Board reviewed each Fund's advisory arrangement, which includes breakpoints that decrease the management fee rate as the Fund's assets increase. In October 2003, in view of the increasing assets of Equity and Income Fund and Global Fund and the resulting economies of scale, the Board negotiated breakpoints to the advisory contracts for those Funds. In 2004, the Independent Trustees negotiated additional breakpoints to the advisory contracts for Oakmark Fund, Select Fund, Equity and Income Fund, International Fund and International Small Cap Fund. Based on its review and negotiations, the Board concluded that each Fund's management fee structure allowed shareholders to benefit from economies of scale as Fund assets increase.

5. Benefits Derived from the Relationship with the Funds

The Board also considered benefits that accrue to the Adviser and its affiliates from their relationship with the Funds. The Board recognized that two affiliates of the Adviser serve the Funds as transfer agent and distributor and that the transfer agent receives compensation from the Funds for its services to the Funds. The Board considered that those services have been provided to the Funds pursuant to written agreements with the affiliates and that the Board evaluated and approved each agreement annually or biennially. The Board also considered the Adviser's use of commissions paid by the Funds on their portfolio brokerage transactions to obtain research products and services benefiting the Funds and/or other clients of the Adviser. The Board concluded that the Adviser's use of "soft" commission dollars to obtain research products and services were consistent with regulatory requirements and benefited the Funds.

The Board also considered the brokerage commissions paid by the Funds to Harris Associates Securities L.P., the Adviser's affiliated broker-dealer. The Board concluded, based on its quarterly review of affiliated brokerage and on additional information it received from the Adviser, that the Adviser's use of an affiliated broker to execute portfolio transactions for the Funds was appropriate and consistent with the procedures for affiliated brokerage adopted by the Board and consistent with regulatory requirements.

After full consideration of the above factors as well as other factors, the Board, including a majority of the Independent Trustees, concluded that approval of each Fund's agreement was in the best interest of the Fund and its shareholders.