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 (3/31/05) AS COMPARED TO THE MSCI WORLD EX U.S. INDEX15   Average Annual Total Returns (as of 3/31/05)   Total Return Last 3 Months* 1-year 5-year 10-year Since Inception (9/30/92) Oakmark International Fund (Class I) 2.13% 17.39% 10.44% 12.16% 12.32% MSCI World ex U.S. 0.07% 15.56% -0.86% 5.74% 7.37% MSCI EAFE16 -0.17% 15.06% -1.15% 5.40% 7.14% Lipper International Fund Index17 -0.05% 12.90% -1.02% 7.46% 8.37% 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 International Fund gained 2% for the quarter, compared to the MSCI World ex U.S. Index, which was basically unchanged. Over the past five years, your Fund has gained 10% annualized relative to the 1% annualized decline of the MSCI World ex U.S. Index.

Portfolio Composition

During the quarter we sold our position in John Fairfax Holdings in Australia as it hit its sell price, and we added three significant new positions, all in Japan. Historically, it has been very difficult for us to find many companies in Japan that meet our investment criteria. But that has not deterred us from continuing to aggressively search. Remember that for a business to be interesting to us it needs to be both undervalued and managed in a shareholder-oriented way. We believe we have found both criteria in these three new positions.

Honda Motor Corporation is familiar to most of you, with quality-for-money models like the Accord, Civic, and the Odyssey. We believe it to be one of the best managed companies in the automotive industry, producing more than three million cars and ten million motorcycles annually with excellent (and consistent) profitability. As well as being strong operationally, Honda's management team has also distinguished itself as sound capital allocators, expanding capacity with discipline and regularly returning excess cash to shareholders. Dividends and share repurchases have steadily increased in recent years, and management has committed to a significant annual payout ratio.

Rohm Corp is a company we've monitored for a number of years, and we have admired its market position and economic performance. It is a global leader in integrated chips and electronic components with a terrific record of profitability and return on capital. With the share price down we finally have an opportunity to buy Rohm at a significant discount to our estimate of intrinsic value.

Another new position for the Fund is consumer products company Uni-Charm, the Japanese leader in baby diapers and hygiene products. Management has consistently improved profit margins and returns in the business, while maintaining strong market shares for its products. Management has behaved in a very shareholder-oriented way, buying back over 10% of shares outstanding and maintaining a high dividend payout ratio.

Looking Forward

Honda, Rohm, and Uni-Charm are representative of the opportunities we are currently finding. We remain optimistic about potential price appreciation, given the quality of the holdings and the attractive valuation of the portfolio. 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—March 31, 2005 (Unaudited)

Schedule of Investments—March 31, 2005 (Unaudited)