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 (9/30/05) AS COMPARED TO THE MSCI WORLD EX U.S. INDEX13   Average Annual Total Returns (as of 09/30/05)   Total Return Last 3 Months* 1-year 5-year 10-year Since Inception (9/30/92) Oakmark International Fund (Class I) 9.04% 25.85% 11.27% 11.62% 12.56% MSCI World ex U.S. 10.92% 26.82% 3.37% 6.23% 7.87% MSCI EAFE14 10.38% 25.79% 3.12% 5.83% 7.58% Lipper International Fund Index15 11.15% 26.32% 3.51% 7.43% 8.87% 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 performed satisfactorily over the past twelve months, returning 26%. This compares with 27% for the MSCI World ex U.S. Index and 26% for the Lipper International Fund Index. Most importantly, since inception, The Oakmark International Fund has returned annually 13%, as compared to the MSCI World ex U.S. Index, which returned 8%, and the Lipper International Fund Index, which returned 9%.

Impact Players

European exchange operator Euronext was not only the top contributing stock of the quarter, but also year to date. As you may recall, both Euronext and another holding, Deutsche Boerse, expressed interest in bidding for The London Stock Exchange. When shareholders prevented Deutsche Boerse from bidding, it ended the possibility of a value-destructive bidding war, and shares of Euronext and Deutsche Boerse rose strongly.

Corporate activity also propelled the share price of long-term holding Aegis Plc. Aegis is the world's last large, independent media-buying company, and it has been the interest of French businessman Vincent Bollore who, as of this writing, has amassed an 11% stake. One of our Fund's holdings, Publicis, has also expressed interest in the company.

On the negative side, UK-based jewelry retailer Signet Plc has been the worst contributing stock of the quarter and second worst year to date. As a result of the extremely weak UK retail environment, the stock is down just under 8% in sterling terms for the year. We remain extremely confident that Signet will continue to build shareholder value over time in both sales and profitability, particularly because it continues to outperform its peers in the U.S. market, which provides two-thirds of its total sales. We have been adding to our holding as a result of the recent price weakness.

New Additions

During the quarter, we added three new names: global brewer InBev, and media stocks TF1 (Societe Television Francaise 1), a French television station operator, and Johnston Press, a Scottish based owner of regional newspapers. In addition to—and even in spite of—the Fund's relatively healthy annual return, we have been able to identify good new ideas and have plenty of prospects on our research list. As long-term international equity investors, we are still finding acceptable investment opportunities, and we remain enthused about future prospects.

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

International Diversification—September 30, 2005

Schedule of Investments—September 30, 2005