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 (12/31/05) AS COMPARED TO THE STANDARD & POOR'S 500 INDEX5
	Average Annual Total Returns  (as of 12/31/05)
	Total Return Last 3 Months*	1-year	5-year	Since Inception (11/1/96)
Oakmark Select Fund (Class I)	4.56%	4.84%	10.37%	18.81%
S&P 500	2.09%	4.91%	0.54%	8.13%
S&P MidCap 4008	3.34%	12.56%	8.60%	14.25%
Lipper Mid Cap Value Index9	1.92%	8.76%	10.50%	11.01%
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, visit www.oakmark.com.
* Not annualized

The Oakmark Select Fund gained 5% during the quarter and again achieved an all-time high NAV¹⁰. This quarter's return was good not only in absolute terms, but it also compared favorably to the S&P 500's gain of 2%. For the full calendar year, a rabbit came out of the hat! After nine months of flat performance, on the last trading day of the year, your Fund caught up with the S&P 500 with a full year increase of 5%. (And, for any skeptics: no, we didn't make any trades on the final trading day!)

We intentionally said that "a rabbit came out of the hat" rather than "we pulled a rabbit from the hat" because we did nothing differently than we'd done throughout the year. No new stocks were added to the portfolio, and no positions were eliminated. As we have often said, we believe our approach will create good long-term results; however, consistent adherence to the discipline can create inconsistent short-term results.

The portfolio's quarterly gain was broad-based: eight of our twenty stocks increased in price by more than five percent, and none of our stocks fell by that amount. The biggest gainer was Moody's, which increased by 20%. We've effectively held Moody's since the Fund's inception in 1996. One of Oakmark Select's initial holdings was Dun & Bradstreet, which spun-off Moody's in 2000. Independence has been good for Moody's. Since the spin-off, the stock has increased by more than 350%. Though that increase was driven largely by very strong earnings growth, we now believe the stock is nearly appropriately valued and have therefore reduced our position. Our financial stocks were also strong performers during the quarter, with JP Morgan up 18% and Washington Mutual up 12%. With the end of rising short-term rates perhaps in sight, investors again focused on this sector's attractive valuations. We continue to like the fundamentals for retail banks, as well as the sector's low valuations and high dividend yields. There is much speculation about consolidation opportunities in retail banking—including speculation that Washington Mutual could be an attractive acquisition target. For us, though an acquisition at full value would be welcome news for any of our holdings, our focus remains on the per-share business value that we see continuing to grow.

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, 2005 (Unaudited)