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 (6/30/05) AS COMPARED TO THE MSCI WORLD EX U.S. INDEX17
	Average Annual Total Returns
	(as of 6/30/05)
	Total Return Last 3 Months*	1-year	5-year	10-year	Since Inception (9/30/92)
Oakmark International Fund (Class I)	-0.05%	15.24%	8.93%	11.21%	12.06%
MSCI World ex U.S.	-0.78%	14.55%	-0.34%	5.55%	7.16%
MSCI EAFE18	-1.01%	13.65%	-0.58%	5.22%	6.91%
Lipper International Fund Index19	-0.60%	13.45%	-0.19%	6.86%	8.15%

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 was basically unchanged for the quarter, compared to a slight decline in the MSCI World ex U.S. Index, which was down 1%. Over the past five years your Fund has gained 9% annualized relative to a flat MSCI World ex U.S. Index.

Portfolio Composition

During the quarter we eliminated four positions in the Fund: Olympus Corp (Japan), Metso (Finland), Michelin (France), and EnCana (Canada). As each of these stocks approached their respective fair values, they were sold and the proceeds redeployed in companies with more attractive valuations.

We wrote last quarter about three significant new positions in the Fund, all located in Japan. Throughout the quarter we continued to add to those names: Honda Motor Corporation, Rohm Company, and Uni-Charm. This quarter, we added another significant position in Japan that fits our investment criteria, NTT DoCoMo.

DoCoMo is Japan's largest wireless service provider, with a current market share of 56%. The business has attractive returns, very strong expected free cash flow generation, and good potential to expand comparatively low profit margins.

The share price is trading at close to an all-time low, near the same level as at the original listing back in 1998, and down over 80% from its "TMT" (Technology, Media, Telecommunications) bubble high in 2000. DoCoMo trades at roughly 8.5x our estimate of current year operating profit, which we think is very attractive for this business. Finally, we are encouraged by management's improving shareholder focus. For example, in 2004 the Company returned 90% of net income to shareholders via buy-backs and dividends (up from 5% in 2001).

Thanks to the addition of DoCoMo and other new opportunities in the past two quarters, your Fund's weighting in Japan has grown to 12 percent of the portfolio. We are pleased to find so many quality Japanese companies that sell at attractive prices and are run by managements who are shareholder-oriented. This is the largest weighting we have had in the country since the inception of the Fund in Sep-tember1992.

Looking Forward

We remain excited about the value and quality of the names in the Fund. Thank you for your continued confidence and support.

David G. Herro, CFA Portfolio Manager dherro@oakmark.com	Michael J. Welsh, CFA, CPA Portfolio Manager mwelsh@oakmark.com

International Diversification—June 30, 2005 (Unaudited)

Schedule of Investments—June 30, 2005 (Unaudited)